ETFs
U.S. regulators may approve launch of ether spot ETFs by July 4, sources say By Reuters
By Suzanne McGee and Hannah Lang
(Reuters) – The U.S. Securities and Exchange Commission could approve exchange-traded funds (ETFs) tied to the spot price of ether as early as July 4, amid negotiations between asset managers and regulators are entering 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 these funds. Most of them had launched spot bitcoin ETFs in January, the culmination of a decade-long struggle with regulators. Grayscale hopes to once again convert an existing fund into an ETF.
Executives at two companies, who requested anonymity because of the confidential nature of the discussions, said the process of amending the offering documents had progressed to address only “minor” issues. These documents must be approved before the ETFs can be launched.
A lawyer working with one of the issuers, who also requested anonymity, said it remained “in the final touches” and approval was “probably no more than a week or two away.”
The SEC 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 questions.
The January launch of funds that track the spot price of bitcoin was one of the most successful in the ETF market, attracting some $8 billion in assets, according to Morningstar Direct data. At the end of June, these nine new products totaled nearly $38 billion in assets, although holdings at Grayscale Trust — which simultaneously converted its $27 billion Bitcoin trust into an ETF — fell to $17.8 billion .
Many ETF and cryptocurrency analysts believe that the launch of the new spot ether ETFs will be less impressive.
“is not the same size in terms of market capitalization, nor the same volumes,” said James Butterfill, head of research at Coinshares.
The price of ether has stagnated this month, falling more than 11%, alongside a 9.8% decline in bitcoin. Bitcoin’s movements generally impact the price of ether.
Given the differences in the market size and nature of the two cryptocurrencies, inflows could be much more muted when ether ETFs launch, said Bryan Armour, ETF analyst at Morningstar.
“With bitcoin, there was pent-up demand for a decade and investor interest was off the charts,” he said. “It just won’t generate the same enthusiasm.”
The SEC has already approved the rule changes necessary for the New York Stock Exchange, Nasdaq and Cboe to list and supervise trading of the new products. This means that once SEC staff approves the documents, products could begin trading in as little as 24 hours.