Analyst: Newly-Approved Spot Ether ETFs Could Commence Trading in Mid-June
Newly-approved spot Ethereum exchange-traded funds (ETFs) may hit the market by mid-June. After successfully filing for spot Ether ETFs, the next step is to obtain approved S-1 registration statements before trading can begin.
According to Bloomberg ETF analyst James Seyffart, the S-1 approvals could be granted in a “couple of weeks,” although the process could take up to five months. However, fellow Bloomberg ETF analyst Eric Balchunas believes that a mid-June launch is possible.
Balchunas expects a single round of comments on the S-1 amendments, similar to the feedback provided for spot Bitcoin ETF applicants, which could speed up the approval timeline.
VanEck, one of the applicants, wasted no time and filed its amended S-1 shortly after receiving approval for the filings. Other applicants are expected to follow suit soon.
However, Gabriel Shapiro, general counsel at Delphi Labs, points out that the SEC’s approval was granted by its Division of Trading and Markets unit under delegated authority. He suggests that one of the five SEC Commissioners could challenge the decision within the next 10 days.
Nevertheless, digital asset lawyer Joe Carlasare believes that a challenge is unlikely, as passing it through the trading and markets division indicates no opposition from the Commissioners.
In terms of market expectations, Seyffart predicts that spot Ether ETFs could attract about 20% of the flows that spot Bitcoin ETFs have seen. Balchunas offers a more conservative estimate of 10-15%.
Since the launch of spot Bitcoin ETFs about four and a half months ago, they have accumulated $13.3 billion in net inflows. Even capturing 20% of that figure would result in spot Ether ETFs amassing a combined $2.66 billion in inflows over a similar timeframe.
However, concerns have arisen about potential outflows from the Grayscale Ethereum Trust if investors shift their holdings to spot Ether ETFs, similar to the outflows seen with the conversion of Grayscale’s Bitcoin investment product.
The Grayscale Ethereum Trust currently holds over $11.3 billion in assets. On May 23, regulatory approval was granted to eight applicants, including VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Bitwise, and Invesco Galaxy. One ETF issuer, Hashdex, did not receive approval that day.
According to Singapore-based QCP Capital, the approval of spot Ethereum ETFs in the United States could potentially trigger a substantial rally of up to 60% in the price of ETH. QCP Capital noted that when spot Bitcoin ETFs were approved in January, Bitcoin experienced a significant surge in price.
“With Friday implied volatility above 100%, the market is expecting fireworks,” QCP Capital stated.
