Ethereum Spot ETFs Reportedly Nearing SEC Approval, Bitwise CIO Predicts $15B Inflows

The U.S. Securities and Exchange Commission is reportedly on the verge of approving spot Ethereum exchange-traded funds as early as July 4th.

The U.S. Securities and Exchange Commission (SEC) might approve spot Ethereum exchange-traded funds (ETFs) as early as July 4th, according to several people familiar with the matter.

Eight companies, including BlackRock (NYSE:BLK), VanEck, Franklin Templeton, and Grayscale Investments, are now in front of the line seeking SEC approval for their ETFs. Discussions between the prominent asset managers and regulators have reached the final stages, and minor issues remain to be ironed out before approval.

Sources close to the discussions, who spoke on condition of anonymity due to the sensitive nature of ongoing negotiations, said the process of amending necessary offering documents is nearing completion.

One lawyer, familiar with one of the issuers, said that approval for these ETFs could come within “a week or two.”

approval for these ETFs could come within “a week or two.”

People familiar with the matter said that BlackRock’s iShares unit, which applied to launch a physical bitcoin ETF last year, is now seeking to offer a spot Ethereum ETF. However, BlackRock declined to comment on the specific plans.

Meanwhile, Bitwise CIO predicts $15B inflows for Ethereum ETPs

Matt Hougan, chief investment officer of Bitwise, had a bold call, estimating that Ethereum-linked ETPs might see as much as $15 billion in net inflows within the first 18 months after launch. Hougan’s estimate is based on relative market size and prior investment patterns in the cryptocurrency space, pointing to the potential for significant interest from investors.

Comparing existing markets in Europe and Canada, where crypto ETPs have started to gain traction, Hougan said Ethereum’s market share tends to track its global market capitalization quite closely. This suggests a relatively balanced approach on the investor demand side.

He pointed to one of the critical differences in investor behavior between Bitcoin and Ethereum products, subtly hinting that Ethereum’s slightly lower adoption rate in such markets might also be part of initial investor preference.

However, one major factor tempering the estimates by Hougan is the lack of a juicy carry trade setup that has propped up Bitcoin ETF investments. Unlike Bitcoin, where we’ve seen meaningful institutional interest in using futures contracts on it to make a possible bet; the Ethereum ecosystem presents different problems for such speculative trading activities.

If launched, this would mark a significant development in the institutional adoption of Ethereum. It will also decentralize investment portfolios and increase the pace of mainstream use of Ethereum as a viable asset class within traditional financial markets.

Lofty predictions have been made for how the broadened access to the crypto market in the United States will look once the looming approval of Ether-linked ETFs finally comes into existence, set against a backdrop of growing anticipation and with institutional players on board ready to reap the rewards of this breakthrough in regulation.

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