Bloomberg analyst Eric Balchunas has pushed back his expected launch date for the Ethereum Spot ETF in the United States. This development follows comments from the U.S. Securities and Exchange Commission on the second round of Form S-1 filings.
Forms S-1 receives behind schedule response from SEC – details
In May, the SEC abruptly approved 19b-4 filings from eight potential issuers of the Ethereum spot ETF, marking the first step toward the eventual launch of these mutual funds. Under U.S. regulations, the Commission is also expected to approve the S-1 forms of proposed ETFs before they begin trading. For context, the S-1 forms contain information about the ETF’s investment objectives, strategy, risks, fees, etc.
After initially submitting all draft Form S-1s on May 31, the SEC quickly responded, writing that they were “fairly modest” and all issuers were required to provide the requested amendments within a week.
Given the speed of action, Eric Balchunas suggested that the Commission approve these forms quickly, choosing July 2 as a potential launch date for the Ether Spot ETF. However, the SEC responded to the second round of comments with considerable delay, albeit also in the form of requests for “minor corrections.”
Due to this development and the speedy approaching American Thanksgiving holiday, during which not much work will be possible next week, Balchunas predicts Work on S-1 forms will resume on July 8, with approval to follow shortly thereafter.
Unfortunately, I think we’ll have to postpone our over/unders until after the holidays. It looks like the SEC needed more time to get back to users this week (although again very minor tweaks) and from what I hear next week, because holiday = July 8th, the process will resume and they’ll launch shortly after that… https://t.co/0ZQR7yiBLt
— Eric Balchunas (@EricBalchunas) June 28, 2024
It is worth noting that, unlike Forms 19b-4, Forms S-1 do not have a set deadline, and their approval depends solely on whether the SEC finds the terms proposed by the issuers satisfactory. Earlier in June, SEC Chairman Gary Gensler said the process could “take some time,” adding that approval would largely depend on how applicants responded to the commission’s comments.
Ethereum Spot ETFs are expected to quickly reach $1 billion inflows
In other news, investors and analysts remain sanguine about the potential performance of Ethereum Spot ETFs when they eventually begin trading. IN Post X On June 28, Charles Yu, vice president of research at Galaxy Research, backed these funds to cover at least 20-50% of the demand seen for Bitcoin equivalents.
Given the estimated total inflows into the Bitcoin Spot ETF of $15 billion, Yu predicts that ETH will see monthly inflows of $1 billion within the first 5 months of trading. Additionally, Charles Yu expects Ethereum to show greater price sensitivity to these inflows for a variety of reasons, including lower net inflation and a lower percentage of supply on exchanges.
Featured image from Space.com, chart from Tradingview