Asset managers are eagerly awaiting the Security and Exchange Commission’s approval for the first U.S. ETFs directly investing in Ethereum. There is optimism that this approval may come as soon as mid-July. The SEC has set a deadline of July 8 for ETF applicants to submit updated paperwork and amended S-1s, with possible additional rounds of filings. A report by Bloomberg, citing sources familiar with the matter, mentioned the likelihood of further filings after the July 8 deadline. Feedback from the SEC to issuers has primarily consisted of minor questions that are currently being addressed.
Steve Kurz, the Head of Asset Management at Galaxy Digital, expressed confidence that an Ether ETF could be approved within the next few weeks. He emphasized that the SEC’s engagement in the process has been ongoing for months, drawing parallels with the Bitcoin ETF approval process. Major asset managers like BlackRock, Fidelity, Ark 21Shares, and Invesco have pending filings for Ethereum ETFs, but many issuers have yet to disclose their fund fees before trading can begin. It remains uncertain if Ethereum ETFs will attract similar demand to spot Bitcoin ETFs, which have accumulated $52 billion in assets since their launch earlier this year.
Analysts have predicted that Ethereum ETF flows could represent about 10% to 15% of Bitcoin ETF flows, potentially leading to a 30% decrease in ETH prices following their launch. Despite this, crypto research firm K33 Research anticipates Ethereum to outperform Bitcoin in July. The firm views ETFs as a catalyst for relative strength in Ethereum as summer progresses and flows increase. Senior analyst Vetle Lunde wrote in a July 2 report that current ETH/BTC prices are attractive for patient traders.
Bitcoin could face selling pressure due to an upcoming distribution of nearly $9 billion worth of BTC related to the defunct Mt. Gox exchange. Conversely, Ethereum prices are currently showing a lack of positive momentum, with the asset dropping 3% to an intraday low of $3,342 during Asian trading on Wednesday. Although ETH briefly surpassed $3,500 earlier in the week, it has since retreated along with the broader crypto market. Ethereum is now 17% down from its 2024 peak and 31% down from its all-time high in November 2021.
The outlook for Ethereum ETF approval by the SEC remains cautiously optimistic, with market expectations and price predictions providing a mixed picture of potential outcomes. Investors and asset managers are closely monitoring developments in the ETF approval process and how they may impact the price movements of Ethereum in the coming weeks.
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