TL;DR
- Ethereum ETFs approved by the SEC could begin trading by mid-June, according to Bloomberg analysts.
- VanEck and other applicants have already submitted their amended S-1 filings, expecting minimal comments to expedite approval.
- QCP Capital predicts that the approval of ETH ETFs could trigger a significant increase in the price of ETH, similar to the impact seen with Bitcoin.
Ethereum-based exchange-traded funds (ETFs) recently approved by the SEC could debut on the market by mid-June, according to analysts. These new products represent a further step in the evolution of the crypto market, allowing investors to access ETH without the need to directly acquire the digital asset.
The approval of the 19b-4 filings has allowed the ETFs to be listed on exchanges. The next step in the process is the approval of the S-1 registration statements, which is essential for the ETFs to begin trading. James Seyffart, a Bloomberg analyst, predicts that these approvals could be granted in a few weeks, although he notes that the process could extend up to five months. On the other hand, Eric Balchunas, also from Bloomberg, is optimistic about a June launch, following a single round of comments on the S-1 amendments, similar to what was observed with Bitcoin ETFs.
Going to add here. Typically this process takes months. Like up to 5 months in some examples but @EricBalchunas and I think this will be at least somewhat accelerated. #Bitcoin ETFs were at least 90 days. Will know more soon.
— James Seyffart (@JSeyff) May 23, 2024
VanEck, one of the approved applicants, has acted quickly, submitting its amended S-1 immediately after receiving the 19b-4 approval. Other applicants, such as BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Bitwise, and Invesco Galaxy, are expected to follow suit shortly. However, Hashdex did not receive approval in this round.
Meanwhile, Gabriel Shapiro, general counsel of Delphi Labs, has warned that an SEC commissioner could challenge the decision within the next ten days. However, digital asset lawyer Joe Carlasare considers such a challenge unlikely. According to Carlasare, the fact that the approval was managed by the Division of Trading and Markets suggests there is no significant opposition from the commissioners.
Ethereum Could Rise Up to 60%, According to QCP Capital
In terms of market impact, Seyffart estimates that Ethereum ETFs could attract approximately 20% of the flows seen by Bitcoin ETFs. In contrast, Balchunas offers a more conservative projection of 10-15%. Since their launch just over four months ago, Bitcoin ETFs have accumulated around $13.3 billion in net inflows. If ETH ETFs capture even a fraction of that success, significant inflows into the Ethereum market could be expected, estimated at up to $2.66 billion.
However, there are concerns about the potential negative impact on the Grayscale Ethereum Trust. If investors decide to transfer their holdings to the new ETFs, the Trust could experience capital outflows, similar to what happened with Grayscale’s Bitcoin investment product.
Singapore-based investment firm QCP Capital believes that the approval of Ethereum ETFs in the United States could trigger a substantial rally in the price of ETH, potentially up to 60%. Their optimism is based on the observation that, following the approval of Bitcoin ETFs in January, the price of Bitcoin surged from $42,000 to over $73,000 within two weeks.
