SEC Approves Spot Ethereum ETFs by July 4, Reports Indicate
Key Insights:
- Industry insiders predict that the SEC will approve spot Ethereum ETFs by July 4, with minor issues remaining to resolve.
- Analysts forecast a 40% rise in ETH prices within two months following the launch of spot Ethereum ETFs.
- SEC Chair Gary Gensler states the approval process is smooth, pending full disclosure by asset managers.
The U.S. Securities and Exchange Commission (SEC) is reportedly close to approving exchange-traded funds (ETFs) tied to the spot price of Ethereum (ETH). According to industry executives and participants cited by Reuters, the approval could come as soon as July 4, 2024, as talks between asset managers and regulators enter their final stages.
Industry Anticipates Imminent Approval
Recent reports indicate that the SEC is in the last stages of discussions with multiple asset managers regarding approving spot Ethereum ETFs. Notable firms such as BlackRock, VanEck, Franklin Templeton, and Grayscale Investments are among those seeking SEC approval. These firms had previously rolled out spot Bitcoin ETFs in January following a prolonged engagement with regulators.
A lawyer involved with one of the ETF issuers expressed optimism, stating that the process is “down to the finishing touches” and that approval is “probably not more than a week or two away.” Executives from two other firms confirmed that only minor issues remain resolved before the ETFs can be listed and traded in the U.S. market. Once the SEC staff approves these documents, trading could commence within 24 hours.
During a Bloomberg event, SEC Chair Gary Gensler recently commented on the progress of the spot Ethereum ETF approvals. He mentioned that the process is “going smoothly” and emphasized the importance of asset managers making complete disclosures in their registration statements. According to Gensler, the speed of approval largely depends on how quickly the issuers can implement the changes suggested by the SEC.
Market Analysts and Price Predictions
The potential launch of spot Ethereum ETFs has prompted various market analyses and predictions regarding its impact on ETH prices. StoneX’s recent analysis forecasts a 40% ETH price growth within two months of the ETFs going live. The report also projects that ETH’s price could range between $2,142 and $12,621 over the next two years. These predictions are considered conservative, considering the belief that non-fungible tokens (NFTs) will not regain the mainstream attention they enjoyed in 2021.
In contrast, Bloomberg analyst Eric Balchunas predicted that ETH ETFs might launch around July 2 and suggested they attract lower net flows than initially expected. Balchunas noted that ETH futures ETFs, such as the largest one, EETH, have not performed as well as their Bitcoin counterparts. This observation has led to some skepticism about the potential success of spot ETH ETFs.
Varied Perspectives on Institutional Interest
Matt Hougan, Chief Investment Officer at Bitwise, has a more optimistic outlook. He predicts that spot Ethereum ETFs could attract up to $15 billion in net flows by the end of 2025. He based this estimate on Ethereum’s relative market cap compared to Bitcoin, the volume of international crypto ETFs, Grayscale Ethereum Trust conversion, and the Bitcoin “carry trade.”
Andrew Kang, founder and partner at Mechanism Capital, suggested that ETH might see less institutional interest than Bitcoin. He cited Ethereum’s network cash flows as a less compelling factor for institutional investors, which could result in a smaller impact on ETH prices following the ETF approval.
As of press time, the price of ETH was trading at $3,400, indicating a 0.74% increase in the past 24 hours with a market cap of $408 billion. Despite a recent downturn, ETH has grown significantly, up 80% since July 2023. Trading volumes have declined, dropping 5.40% to $11.4 billion in the past 24 hours. Data from DefiLama indicates that Ethereum holds over $58.78 billion in total value locked (TVL).
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