Ethereum’s price faced a setback after reaching the $3,500 mark on Monday, dropping back to the $3,400 support level due to a delay in the full approval of Ethereum ETF applications by the Securities and Exchange Commission (SEC). The SEC was expected to approve the applications by July 2, but issuers were requested to submit revised filings by July 8, pushing back the approval timeline. This delay has caused uncertainty in the market regarding the launch of Ethereum ETFs in the US.
Despite the setback, asset managers and analysts remain optimistic about the eventual approval of Ethereum ETFs by the SEC. The constructive dialogue between asset managers and the regulator, as highlighted in a recent Bloomberg report, indicates that the feedback received from the SEC has been relatively minor, with issuers working to address any questions raised. Various prominent firms, including BlackRock Inc., Fidelity Investments, and Invesco, have their filings awaiting approval, showing a strong interest in launching Ethereum ETFs in the US market.
There is speculation about the potential demand for Ethereum ETFs once they are approved for trading. While some analysts predict significant inflows into these ETFs in the first few months of trading, it is uncertain whether they will attract the same level of demand as the newly approved Bitcoin ETF market. Bitwise’s Chief Investment Officer, Matt Hougan, projected $15 billion in net inflows for Ethereum ETFs within the first 18 months of trading, based on the expected proportionate allocation of investments from investors in Bitcoin ETPs. However, it remains to be seen if Ethereum ETFs will be able to match the rapid influx of assets seen in the Bitcoin ETF market.
The comparison between Ethereum ETFs and Bitcoin ETFs is essential in understanding the potential market impact of Ethereum ETF approvals. While Ethereum is gaining popularity as a digital asset, it may not command the same level of institutional interest as Bitcoin. The launch of Ethereum ETFs will be closely monitored to see if they can replicate the success of Bitcoin ETFs, which gathered significant assets within a short period.
The setback in the approval of Ethereum ETFs by the SEC has created uncertainty in the market, but asset managers and analysts remain optimistic about the eventual approval and launch of these products. The comparison with Bitcoin ETFs highlights the challenges and opportunities that Ethereum ETFs may face once they are approved for trading. It will be interesting to see how investors respond to the introduction of Ethereum ETFs and whether they can attract a similar level of demand as their Bitcoin counterparts.
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