SEC Clears Path for Spot Ether ETFs, Launch Expected Soon

Spot Ether exchange-traded funds (ETFs) could launch as early as next week after a Reuters report revealed that at least three issuers have received preliminary approval from the US Securities and Exchange Commission (SEC). 

Eight issuers are awaiting the SEC’s greenlight on the S-1 registration statements for the ETFs to start trading. According to sources who spoke with Reuters, some of these issuers have received preliminary approval. 

Ether has been on a pre-ETF rally that has seen it leap by over 11% in seven days. ETH was trading at $3,404 on July 16 at 09:18 a.m. EST after a 1.4% gain in 24 hours. 

Spot Ether ETFs Set for Possible Launch Next Week 

Reuters noted that these ETFs could start trading on July 23. The final approval will depend on the issuers submitting their amended S-1 registration statements by the end of the week. 

Bloomberg ETF analyst Eric Balchunas noted that the SEC had asked all the ETF applicants to submit their final offering statements by Wednesday this week. 

“Hearing the SEC [has] finally gotten back to issuers today, asking them to return FINAL S-1s on Wednesday (including fees) and then request effectiveness on Monday after close for a TUESDAY 7/23 LAUNCH,” Balchunas said. 

Balchunas’s X post was in response to the President of the ETF Store, Nate Geraci. Geraci called this week the “spot ETH ETF approval week,” adding that the SEC had no reason for further delays. 

Similar to what happened with Bitcoin ETFs, the spot Ether ETFs might launch simultaneously. The approval will mark another significant win for the US cryptocurrency industry, which has often complained about the lack of a clear regulatory framework. 

Some applicants awaiting the SEC’s greenlight include BlackRock, Fidelity, and Franklin Templeton. The three are among the largest financial institutions on Wall Street. 

Citi Anticipates ETF Inflows to Hit $5.4B 

Analysts at investment bank Citi anticipate that spot Ether ETFs will attract net inflows of between $4.7 billion and $5.4 billion during the first six months of trading. 

The analysts opined that Ether ETF inflows will equal 30%-35% of the inflows to spot Bitcoin ETFs. 

The investment bank noted that some of the reasons why ETH ETFs will see lower volumes is because the asset offers more diversification benefits. Moreover, it had other use cases, such as staking, giving holders less incentive to allocate their holdings to ETF products. 

Some spot Ether ETF applicants had included staking as part of their offering. However, they were forced to remove this provision before approving the 19b-4 forms in late May. 

The other factor that could also inhibit the growth of spot ETH ETFs is Bitcoin’s first-mover advantage. Bitcoin was the first spot crypto ETF to get approval in the US, and it has already attracted over $50 billion in inflows since the products started trading in January 2024.