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SEC Nears Approval of Spot Ether ETFs with July 4 Launch in Sight

Quiver Editor

The U.S. Securities and Exchange Commission (SEC) could approve exchange-traded funds (ETFs) tied to the spot price of ether as soon as July 4, according to industry executives and participants. Eight asset managers, including BlackRock (BLK), VanEck, Franklin Templeton (BEN), and Grayscale Investments (GBTC), are seeking SEC approval for these funds. Most had previously rolled out spot bitcoin ETFs in January, after a prolonged regulatory battle. Grayscale aims to convert an existing trust into an ETF. Sources indicated that the process of amending offering documents is nearly complete, with only minor issues remaining.

The SEC's approval process for these ETFs is in the final stages. A lawyer working with one of the issuers mentioned that the approval is likely just a week or two away. SEC Chair Gary Gensler stated that the launch date partly depends on how quickly issuers respond to the regulator's queries. The January launch of spot bitcoin ETFs was highly successful, drawing $8 billion in assets initially and nearly $38 billion by late June. However, analysts predict a less impressive debut for the ether ETFs, noting that ether's market cap and trading volumes are smaller compared to bitcoin.

Market Overview:
  • SEC could approve spot ether ETFs by July 4.
  • Eight asset managers, including BlackRock and VanEck, seek approval.
  • Previous spot bitcoin ETFs saw significant success.
Key Points:
  • Approval process for ether ETFs is nearing completion.
  • January’s spot bitcoin ETFs garnered nearly $38 billion in assets.
  • Analysts expect lower initial inflows for ether ETFs compared to bitcoin.
Looking Ahead:
  • Ether ETFs may launch within weeks if SEC approval is granted.
  • Market response to ether ETFs likely muted due to smaller market size.
  • Continued interest in cryptocurrency ETFs as regulatory landscape evolves.

Despite the potential approval, many ETF and cryptocurrency analysts believe the launch of the new spot ether ETFs will not replicate the success of the bitcoin ETFs. James Butterfill, head of research at Coinshares, pointed out that ether’s market cap and trading volumes are smaller. The price of ether has also fallen over 11% this month, influenced by bitcoin’s 9.8% drop. Analysts like Bryan Armour from Morningstar suggest that the investor excitement for ether ETFs will not match the decade-long pent-up demand seen with bitcoin ETFs.

The SEC has already approved the necessary rule changes for the New York Stock Exchange, Nasdaq (NDAQ), and Cboe to list and oversee trading in these new products. This means that once the SEC staff signs off on the filings, the ETFs could start trading within 24 hours. As the regulatory landscape for cryptocurrency evolves, these developments highlight the growing integration of digital assets into mainstream financial markets.

About the Author

David Love is an editor at Quiver Quantitative, with a focus on global markets and breaking news. Prior to joining Quiver, David was the CEO of Winter Haven Capital.

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