Bloomberg analyst Eric Balchunas has pushed back his expected deadline for the launch of Ethereum Spot ETFs in the United States. The development follows comments from the U.S. Securities and Exchange Commission regarding the second round of S-1 forms.
S-1 Forms Receive Late Response from SEC – Details
In May, the SEC abruptly approved the 19b-4 filings of eight potential issuers of the Ethereum spot ETF, marking the first step towards the eventual launch of these investment funds. In accordance with U.S. regulations, the Commission is also expected to give the green light to the S-1 forms of these proposed ETFs before trading can begin. For context, the S-1 forms contain information about an ETF’s investment objectives, strategies, risks, fees, etc.
Following the initial filing of all draft S-1 forms on May 31, the SEC responded quickly with comments described as “fairly light,” directing all issuers to file the requested changes within one week.
Based on the speed of work, Eric Balchunas suggested that the Commission quickly approve the approval of these forms July 2nd as a possible launch date of the Ether spot ETF. However, the SEC has been noticeably late in responding to the second round of comments, although the requests have also been described as “mild adjustments.”
In light of this development and the fast-approaching American Thanksgiving holiday, which will mean little work can be done next week, Balchunas predicts Work on the S-1 forms will resume on July 8, with approval to follow shortly thereafter.
Unfortunately I think we will have to postpone our over/under until after the holidays. It seems SEC needed extra time to get back to ppl this week (although again very slight adjustments) and from what I hear next week is dead bc holidays = July 8th the process will resume and they will launch shortly after… https://t.co/0ZQR7yiBLt
— Eric Balchunas (@EricBalchunas) June 28, 2024
It is important to note that, unlike 19b-4 forms, S-1 forms do not have a fixed deadline and approval depends solely on the SEC’s satisfaction with the issuers’ proposed terms. Earlier in June, SEC Chairman Gary Gensler had done the same declared this process could “take some time” as approval will largely depend on applicants’ response to the Commission’s comments.
Ethereum Spot ETFs Expect $1 Billion Inflows Soon
In other news, investors and analysts remain optimistic about the potential performance of the Ethereum Spot ETFs when they eventually launch. In a X-message On June 28, Charles Yu, Vice President of Research at Galaxy Research, backed these funds to cover at least 20-50% of the demand from Bitcoin counterparts.
With total inflows into Bitcoin Spot ETFs estimated at $15 billion, Yu predicts that Ethereum ETFs will record $1 billion in monthly flows during the first five months of trading. Furthermore, Charles Yu expects Ethereum to exhibit higher price sensitivity to these inflows due to several reasons, including lower net inflation and lower supply ratio on exchanges.
Main image from Space.com, chart from Tradingview