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Ethereum (ETH) price suffered a setback after briefly surpassing the $3,500 level on Monday, falling back to the $3,400 support level on Tuesday. The delay stems from the expected full approval by the Securities and Exchange Commission of applications for Ethereum exchange-traded funds, which has now been postponed to July 8.
SEC Requests Revised Filing of Returns
Analysts initially expected approval by July 2, but the SEC asked issuers to submit revised filings by July 8. Bloomberg ETF expert Eric Balchunas shared on social media that the SEC took extra time to provide comments, resulting in a revised timeline. advertiser:
Unfortunately, I think we will have to postpone our forecast until after the holiday. It seems that the SEC took extra time to get back to people this week (although with minor adjustments again) and from what I hear, next week is over because the holiday = July 8th, and the process resumes and then soon they will be releasing
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SEC Chairman Gary Gensler previously indicated that Ethereum ETFs are likely to be approved by “the end of the summer.” The SEC is currently reviewing and approving the S-1 Formswhich represents the second step in launching spot Ethereum ETFs.
Despite the delay, asset managers remain optimistic about the SEC giving the green light to the first U.S. Ethereum spot ETF applications that invest directly in etherThe US Treasury bonds are expected to be issued in mid-July. A recent Bloomberg report highlighted the constructive dialogue between asset managers and the regulator.
Ethereum ETF Launch Is Nearing
according to a reportThe regulator’s comments raised minor questions that issuers are now addressing. In May, the SEC approved the exchanges’ proposal to list these products, which would require separate approval to launch.
Galaxy Digital’s head of asset management Steve Kurtz expects approval for an Ethereum ETF within the next two weeks. Galaxy Digital has applied for an Ether ETF, and Kurtz expressed confidence in the process, stressing that they are familiar with the requirements based on their experience in Bitcoin Exchange Traded Fund.
Several prominent firms, including BlackRock, Fidelity Investments, 21Shares and Invesco, are awaiting approval of their applications, and disclosing the fees charged by the funds in question is a necessary step before trading begins.
Assuming the funds get the green light, one key question remains: Will ether wallets generate a similar level of demand as the historic debut of bitcoin ETFs in the U.S. in January, which raised $52 billion in assets?
$15 billion in inflows in first 18 months
As before Reported Ethereum ETFs may attract significant inflows in the first few months of trading, although they may not have the same volume of inflows as the newly approved Bitcoin ETF market.
In a note to investors, Matt Hogan, Bitwise’s chief investment officer, expects these ETFs to see net inflows of $15 billion during the first 18 months of trading.
To arrive at this estimate, Hogan looked at the market caps of Bitcoin and Ethereum, expecting investors to allocate their money to each. Exchange Traded Products (ETPs) proportionately.
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Hogan noted that US investors have already invested $56 billion in spot bitcoin exchange-traded funds, and he expects that number to reach $100 billion or more by the end of 2025.
Based on this reference, he determined that spot Ethereum ETFs would need to attract $35 billion in assets to match Bitcoin ETFs, a process that could take about 18 months.
He also noted that Ethereum ETFs will launch with $10 billion in assets, thanks to the Grayscale Ethereum Trust (ETHE) being converted into an ETF.
At the time of writing, ETH is trading at $3,418, recording significant losses on the monthly timeframe of more than 9%.
Featured image by DALL-E, chart by TradingView.com
