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Written by Susan McGee and Hannah Lange
(Reuters) – The U.S. Securities and Exchange Commission may approve ETFs linked to the spot price of ethereum on July 4, as talks between asset managers and regulators enter their final stages, industry executives and other participants told Reuters. .
Eight asset managers, including BlackRock (NYSE:), VanEck, Franklin Templeton and Grayscale Investments, are seeking SEC approval for the funds. Most of them launched bitcoin ETFs in January, the culmination of a decade-long struggle with regulators. Grayscale is once again hoping to turn the existing trust into an ETF.
Executives at two companies, who requested anonymity due to the confidential nature of the discussions, said the process of amending the offering documents was being advanced only to resolve “minor” issues. These documents must be approved before the ETFs are launched.
A lawyer working with one of the sources, who also requested anonymity, said it was “a matter of final touches” and that approval “will probably not take more than a week or two.”
The Securities and Exchange Commission declined to comment. In an interview with Reuters earlier this month, SEC Chairman Gary Gensler said the launch date depends in part on how quickly issuers respond to the regulator’s inquiries.
The January launch of funds tracking the spot price of bitcoin was one of the most successful launches in the ETF market, attracting $8 billion in assets, Morningstar Direct data showed. As of late June, the assets of these nine new products amounted to approximately $38 billion, although the holdings of Grayscale Trust — which transferred $27 billion of bitcoin into an ETF at the same time — had fallen to $17.8 billion.
Many ETF and cryptocurrency analysts believe that the launch of new ether ETFs will be less impressive.
“It’s not the same size in terms of market cap, and it doesn’t have the same volumes,” said James Butterville, head of research at Coinshares.
The price of ether has been on the decline this month, falling more than 11%, along with a 9.8% decline in Bitcoin. Movements in Bitcoin usually affect the price of Ether.
Given the differences in market size and the nature of the two cryptocurrencies, inflows could be much lower when an Ether ETF launches, said Brian Armour, ETF analyst at Morningstar.
“With bitcoin, there has been pent-up demand for a decade and investor interest has been off the charts,” he said. “This won’t have the same excitement.”
The SEC has already approved rule changes required for the New York Stock Exchange, Nasdaq and the Chicago Mercantile Exchange to list and supervise trading in new products. This means that once SEC employees sign off on the filings, the products can begin trading in less than 24 hours.
