Ethereum (ETH) price experienced a setback as it dropped back to the $3,400 support level after briefly surpassing $3,500 on Monday. The delay in the price surge is attributed to the SEC’s postponement of the expected full approval for Ethereum ETF applications to July 8. Analysts were initially anticipating approval by July 2, but the SEC requested issuers to submit revised filings, pushing back the timeline for approval.
Optimism Despite the Delay
Despite the setback, asset managers remain optimistic about the SEC eventually greenlighting the first US spot Ethereum ETF applications. The dialogue between asset managers and regulators has been constructive, with feedback from the regulator focusing on minor questions that issuers are currently addressing. In May, the SEC approved exchanges’ proposals to list these products, requiring a separate approval for their launch.
Galaxy Digital’s head of asset management, Steve Kurz, predicted the approval of an Ethereum ETF within the next couple of weeks. The firm is confident in the process, given their experience with the Bitcoin ETF. Several prominent firms, including BlackRock Inc., Fidelity Investments, 21Shares, and Invesco, have filings awaiting approval. The disclosure of fees on the funds is a necessary step before trading can commence.
Ethereum ETFs have the potential to attract significant inflows in the first few months of trading, although analysts predict they may not match the volume of inflows seen in the Bitcoin ETF market. Bitwise’s Chief Investment Officer (CIO), Matt Hougan, projected that Ethereum ETFs could see $15 billion in net inflows within their first 18 months of trading. He anticipates a significant increase in investor allocations to spot Ethereum ETFs, with the aim of matching the success of Bitcoin ETFs.
Comparison with Bitcoin ETFs
US investors have already allocated $56 billion to Spot Bitcoin ETPs, with expectations of this figure reaching $100 billion or more by the end of 2025. Spot Ethereum ETFs would need to attract $35 billion in assets to match the success of the Bitcoin ETF market. Hougan estimates that the Spot Ethereum ETFs would launch with $10 billion in assets, largely due to the conversion of the Grayscale Ethereum Trust (ETHE) into an ETF.
This new article has been restructured to provide a more concise and focused analysis of the delay in Ethereum ETF approval by the SEC and the predictions for the market potential of Ethereum ETFs. The paragraphs have been revised and organized under relevant subheadings to enhance readability and flow.
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