Ethereum enthusiasts were cruising down the information superhighway toward a fireworks celebration of a different kind on July 4th: the launch of the first Ethereum ETF in sight.
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But in a move that worried investors, the U.S. Securities and Exchange Commission took a major step forward, unexpectedly returning the candidates’ proposals and delaying the long-awaited debut.
Missed exit: Ethereum ETF launch in July goes up in smoke
The news came as a shock to many, as both market watchers and analysts had confidently predicted a Launching in Julywith some even suggesting a celebratory Independence Day trade.
Bloomberg ETF analysts Eric Balchunas and James Seyffart were among those waving the checkered flag a little too early. Their prediction of a July 2 debut went up in smoke faster than a Roman candle after the SEC decided to put the brakes on the process.
Unfortunately I think we’ll have to postpone our over/under until after the holiday. It seems the SEC took longer to get back to people this week (although again with very slight adjustments) and from what I hear next week is dead bc holiday = July 8th the process resumes and shortly after they’ll be released… https://t.co/0ZQR7yiBLt
-Eric Balchunas (@EricBalchunas) June 28, 2024
Insiders claim that the SEC delayed the expected debut date, requesting changes to the S-1 documentation that issuers submitted. This unexpected deviation raises serious concerns about the calendar as a whole. While there are others who anticipate the release by July 8th, the impending U.S. holiday likely adds another level of difficulty.
Uncharted Territory: The SEC Takes Control
The lack of a definitive timeline is a major source of frustration for investors and issuers alike. Unlike previous Form 19b-4s, which required a specific decision deadline from the SEC, the S-1 filing process gives the regulator the freedom to take its time. This essentially hands the steering wheel to the SEC, allowing them to request revisions and conduct a thorough review without the pressure of a ticking clock.
As chairman of the SEC Gary Gensler While the company had previously hinted at approvals “sometime this summer,” its comments didn’t offer much solace to the jittery market. The recent confusion with S-1 forms indicates that even a summer launch may be overly optimistic. This lack of clarity is a major hurdle for issuers and creates uncertainty for investors eager to jump on the Ethereum ETF bandwagon.
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The road ahead
Even if Ethereum ETF eventually reach the finish line, experts predict they may not attract the same level of investment as their Bitcoin counterparts. Bitcoin’s lower perceived volatility, coupled with the already established Bitcoin ETF landscape, may make them a more attractive option for some investors.
The SEC’s recent actions have thrown the timeline into disarray, leaving investors and issuers in a state of limbo. While approval could still come “sometime this summer,” the lack of clarity and the potential for lower inflows compared to Bitcoin ETFs paint a picture of a difficult journey ahead for these highly anticipated investment vehicles.
Featured image from Pexels, chart from TradingView