In a significant development, the U.S. Securities and Exchange Commission (SEC) is poised to greenlight exchange-traded funds (ETFs) linked to the spot price of Ethereum (ETH). If discussions between investment firms and regulators are finalized, these Ether ETFs could receive approval as early as July 4. Notably, several investment firms, including BlackRock and Grayscale, eagerly await the SEC’s nod to launch these ETFs. This follows the successful launch of spot Bitcoin ETFs in January, marking the resolution of a decade-long regulatory struggle.
Uncharted Territory: Spot Ether ETFs
The spotlight now shifts to Ether. Eight asset managers—BlackRock, VanEck, Franklin Templeton, and Grayscale Investments among them—are seeking SEC approval for spot Ether ETFs. Grayscale, in particular, aims to convert its existing Ethereum Trust into an ETF.
The process of amending the offering documents is nearly complete, with only minor issues remaining. Once these documents receive approval, the ETFs can officially launch. While SEC Chair Gary Gensler has not provided a specific timeline, he emphasizes the importance of full disclosure in registration statements, a prerequisite for ETF approval.
A Different Landscape: Ethereum vs. Bitcoin
Despite the success of Bitcoin ETFs, the launch of spot Ether ETFs may not generate the same fervor. Ethereum’s market cap and trading volumes differ significantly from Bitcoin’s. Ether’s recent price decline—over 11% this month—mirrors Bitcoin’s 9.8% drop. Given these differences, inflows into Ether ETFs might be more subdued. Analysts believe that while Bitcoin had pent-up demand, Ether’s launch won’t command the same excitement. Nevertheless, the SEC has already approved rule changes for listing and overseeing trading in these new products, signaling a potential swift launch.