The SEC has granted initial approval for several spot ether ETFs to commence trading as early as next Tuesday, marking a significant development in the cryptocurrency investment landscape.
BlackRock, Franklin Templeton, and VanEck have reportedly received preliminary approval from regulators for their upcoming spot ETH ETFs. The anticipation of these financial products has attracted substantial interest in Ethereum, with market trends indicating a growing bullish sentiment towards ETH compared to Bitcoin.
Update: Nate's instincts were right, hearing SEC finally gotten back to issuers today, asking them to return FINAL S-1s on Wed (incl fees) and then request effectiveness on Monday after close for a TUESDAY 7/23 LAUNCH. This is provided no unforeseeable last min issues of course! https://t.co/D21FD9Qf94
— Eric Balchunas (@EricBalchunas) July 15, 2024
As reported on Monday by Bloomberg's senior ETF analyst, the U.S. Securities and Exchange Commission (SEC) has directed spot ether ETF issuers to submit their finalized S-1 forms by Wednesday. This procedural step sets the stage for the funds' expected launch on July 23, leading to the debut of the ETFs.
These new finance offerings are predicted to receive substantial investment, with inflows estimated at around $5 billion within the initial half-year period and up to $20 billion throughout the first year.
As of the latest update, Ether was up 6%, trading around $3,490, according to data provided by CoinMarketCap.
ETH funds set for debut
Since September 2023, eight issuers, including BlackRock, 21Shares, VanEck, Grayscale, Fidelity, Bitwise, Franklin Templeton, and Invesco, have been preparing to introduce their funds around Ether. Initially, market participants held reservations about the prospects of an approved Ether-based spot ETF. However, optimism grew following the SEC's approval of crucial regulatory filings from issuers in May.
Industry observers initially targeted July 4 as a potential launch date for these funds, as issuers and SEC staff finalized the last details on their applications.
The #Altcoin market capitalization for crypto finished its correction two weeks ago.
— Michaël van de Poppe (@CryptoMichNL) July 15, 2024
The second half of the year is going to be up-only.
Likely we’ll see 5-10x runs on altcoins and ETH to $6,000-8,000. pic.twitter.com/eM3KS7Jwai
Market expectations and forecasts
According to sources, the SEC had granted preliminary approval to three issuers—Franklin Templeton, BlackRock, and VanEck—for their funds to begin trading next Tuesday. If the launch proceeds on schedule, the upcoming week could be pivotal for the crypto industry, coinciding with the live debut of spot ether ETFs and the Bitcoin 2024 conference in Nashville.
Bitwise CIO Matt Hougan projects that spot ether ETFs could draw in approximately $15 billion inflows during their initial 18 months of trading. Hougan emphasized that his estimates do not yet factor in several positive factors driving Ethereum's growth, such as the increasing use of stablecoins, improved regulatory clarity, and the benefits from the Dencun upgrade, which reduced transaction costs on the blockchain.
"ETH is a compelling asset powering the world's most versatile blockchain. But even $15 billion in net new demand will have a dramatic impact on the Ethereum market," Hougan stated.
Despite increasing anticipation of a spot Ethereum ETF launch, ETH has seen only a modest price rise over the past 24 hours. The leading altcoin by market cap has edged up slightly over 1%, trading at $3,415 as of 2:45 a.m. EST.
The altcoin market completed its correction two weeks ago, setting the stage for a bullish second half of the year. Predictions suggest potential 5-10x increases for altcoins and ETH, reaching $6,000-8,000.
Yet, according to analyst Michael van de Poppe, ETH could climb to between $6,000 and $8,000 in the latter part of this year.
The bottom line
The SEC's initial approval of spot ether ETFs for trading next Tuesday marks a significant step in cryptocurrency investment. Franklin Templeton, BlackRock, and VanEck have received preliminary regulatory nods, boosting interest in Ethereum.
Bloomberg reports that the SEC issued directives for finalized S-1 forms by Wednesday, setting the stage for a July 23 launch. Projections foresee substantial inflows, highlighting Ethereum's potential amidst market readiness and growing industry optimism.
Crypto's securing preliminary approval from the SEC represents a substantial win. It will allow digital assets to become part of the mainstream financial sector and establish an important precedent for upcoming technological developments.