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The U.S. Spot Ether Exchange Traded Fund (ETF), which many people expect to launch as early as July 2, has been postponed by the Securities and Exchange Commission (SEC).
On June 29, The Block reported that the SEC has returned the S-1 form to potential Ethereum ETF issuers, with a small number of comments requesting that the comments be processed and resubmitted by July 8.
Sources pointed out that after the form is returned, this will not be the final declaration.This means at least one more round of declarations is required before the ETF finally starts trading.
SEC delays process
The SEC commented on Form S-1 and requested a resubmission by July 8.According to Balchunas, this new timetable means the launch of spot Ethereum ETFs may be delayed until at least mid-to-late July.
ETF Store president Nate Geraci pointed out that the last round of S-1 revisions was relatively small and the SEC is expected to approve the issuer to conduct transactions within 14-21 days.Although the exact timeline remains uncertain, the SEC has said it could be launched this summer.
Earlier in early June, Balchunas predicted that the ETF would launch in early July, as SEC staff did not make important comments on the S-1 documents of ETF applicants, but it is now impossible.
Two-step process of Ethereum ETF
Approval of Form S-1 is the second part of the two-step process required for an ETF to go public.Part I deals with the approval of the issuer Form 19b-4 in May.On May 23, the SEC approved Form 19b-4 for 8 ETF bidders.
Unlike Form 19b-4, Form S-1 is not subject to specific deadlines and issuers can rely on the SEC timeline for review.
The SEC has approved a rule change that allows major issuers to participate in the process, including BlackRock, Fidelity, 21Shares, Grayscale, Franklin Templeton, VanEck, iShares and Investo.In addition, issuers such as VanEck have submitted Form 8-A to be listed on the exchange before July 8.
While on June 26, SEC Chairman Gary Gensler had previously said that approval of the Ethereum ETF could take place “sometimes this summer,” no clearer timeline was provided.
While there are reports that the ETF could be listed as early as July 4, this is no longer possible now.The issuer still doesn’t know when the ETF will be listed.They only know the exact time to market after the SEC gives them the deadline for submission of the final documents.
The SEC blames applicants for the listing of Ether ETFs and claims that the process depends entirely on their response time.
Bloomberg ETF analyst Eric Balchunas posted on X platform, “It looks like we have to postpone the expected listing of spot Ethereum ETFs until after the holidays. I heard that the SEC spent more time this week to respond to people (although just some)Very slight adjustment), and judging from the news I have heard, the approval process will be restored next week because the holiday will be relatively idle, and the approval process will be resumed on July 8, and then they will be launched soon.”
Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), said recently that he is expected to see spot Ethereum ETFs listed as early as September.
The importance of listing of Ethereum ETFs
Galaxy Research said in a report that once the Ethereum spot ETF is approved for trading, net inflows of funds could reach $1 billion per month.
It expects net inflows of ETH ETFs to reach 20-50% of BTC ETF net inflows in the first five months, and the Galaxy target is 30%, which means a monthly net inflow of $1 billion.
Meanwhile, Galaxy warned that demand for spot Ethereum ETFs could be limited due to the lack of staking rewards.
The outflows of Grayscale Ethereum Trust (ETHE) could also drag down the inflows of Ethereum ETFs, and Galaxy estimates these negative outflows could reach about 319,000 ETH or $1.1 billion per month.
Bitwise believes that the $15 billion inflow in the next 18 months is a good start.The agency believes ETH is a compelling asset that powers the world’s most versatile blockchain.Even a net new demand of $15 billion will have a huge impact on the Ethereum market.
