ETFs
Bloomberg Analyst Eric Balchunas Speculates Spot Ether ETFs Launch by July 2
As the U.S. moves closer to the launch of Ether spot exchange-traded funds (ETFs), according to Bloomberg ETF analyst Eric Balchunas, we could see these ETFs hit the market as early as July 2.
Logic. What I heard: Issuers are still waiting for comments from Corp Fin on the S-1s they submitted 2 weeks ago. Corp Fin is looking at these documents for the first time (why? before the (very likely) last minute political 180 (remember they were as surprised by this as anyone… https://t.co/N32N6jFXBv
– Eric Balchunas (@EricBalchunas) June 13, 2024
What does this development mean for Ethereum investors and the broader crypto industry?
Ether Spot ETF represent a significant milestone for the crypto industry. These investment vehicles allow investors to gain exposure to Ethereum without directly owning the cryptocurrency. Unlike futures-based ETFs, which derive their value from contracts, spot ETFs track the actual price of Ether on exchanges. This distinction is crucial because it provides a more direct link to the underlying asset.
SEC green light and Balchunas speculation
On May 23, the United States Securities and Exchange Commission (SEC) approved eight 19b-4 filings for Ether spot ETFs on various U.S. exchanges, including Grayscale, Bitwise, iShares, VanEck, Ark Invest, Invesco, Fidelity and Franklin Templeton, are among the approved applicants. However, there’s a catch: These ETFs can only begin trading once they receive the necessary S-1 registration statement approvals.
In a Senate Banking Committee hearing On June 13, regarding President Joe Biden’s 2025 budget requests for the SEC, Gensler said he expects the commission approve S-1 Registration Statements for Asset Managers “This Summer.”
Bloomberg’s Eric Balchunas, known for his insightful analyses, is closely monitoring the regulatory landscape. Its recent update suggests that the SEC comments ETF applicants’ S-1 applications were “pretty light, nothing major.” The SEC requested responses from applicants within a week, indicating a positive outlook. Balchunas believes there’s a “good chance” the SEC will declare ETFs effective soon, perhaps before the holiday weekend before U.S. Independence Day.
Gary Gensler’s rather broader calendar
SEC Chairman Gary Gensler also weighed in on the issue. He provided a broader timeline, hinting that Ether spot ETFs could begin trading over the next three months, potentially by the end of September. However, a week earlier, Gensler emphasized that the speed of approvals would depend on how quickly issuers respond to SEC comments. It is a delicate balance between regulatory control and market demand.
Ethereum Price Potential
Investors are carefully watching Ether price movements. Will it follow Bitcoin’s trajectory after its ETF approval? Bitcoin’s ETF approval sparked a surge in January, propelling its price to record highs. For example, you will remember that when BlackRock filed for a Bitcoin ETF on June 15, 2023, The price of Bitcoin jumped about 22% in a week. Since this month, the price of Bitcoin has been showing a positive trend. The year-to-date increase is approximately 60.41%, with an increase of 161.37% over the past year. The current price of Bitcoin is around $66,217, according to data from TradingView, as of this writing.
Balchunas, however, remains cautious. He points out that Ether’s use cases are more complex to evaluate than Bitcoin’s. While some traders remain optimistic, others recognize the need for broad consensus on the usefulness and usage rate of Ethereum.