Ethereum ETF listing delayed

The launch of a U.S. spot Ethereum exchange-traded fund (ETF) that many expected to launch as early as July 2 has been delayed by the U.S. Securities and Exchange Commission (SEC).

On June 29, The Block reported that the SEC had returned Form S-1 to potential Ethereum ETF issuers with a small number of comments, requiring these comments to be processed and resubmitted before July 8.

Sources pointed out that once the form is returned, it will not be the final declaration. That means at least one more round of filings is needed before the ETF finally starts trading.

SEC Delays Process

SEC commented on Form S-1 and required refiling by July 8th. According to Balchunas, this new timeline means that the launch of the spot Ethereum ETF may be delayed until at least mid-to-late July.

ETF Store President Nate Geraci pointed out that the last round of S-1 revisions was relatively minor and the SEC is expected to approve the issuer for trading within 14-21 days. While the exact timeline remains uncertain, the SEC has said it could launch this summer.

Previously in early June, Balchunas predicted that the ETF would be launched in early July because the SEC staff did not make important comments on the S-1 filing of the ETF applicant, but this is no longer possible.

Two-Step Process for Ethereum ETFs

Approval of Form S-1 is the second part of the two-step process required to list an ETF. The first part involves the approval of the issuer's Form 19b-4 in May. On May 23, the SEC approved Form 19b-4 for eight ETF bidders.

Unlike Form 19b-4, Form S-1 is not subject to a specific deadline and issuers can rely on the SEC’s timeline for review.

The SEC has approved a rule change that will allow major issuers to participate in the process, including BlackRock, Fidelity, 21Shares, Grayscale, Franklin Templeton, VanEck, iShares and Invesco. Additionally, issuers such as VanEck have filed Form 8-A in preparation for listing on exchanges by July 8.

While SEC Chairman Gary Gensler previously stated on June 26 that approval of an Ethereum ETF could happen “sometime this summer,” he did not provide a clearer timeline.

While there were reports that the ETF could be available as early as July 4th, that is no longer possible. The issuer doesn’t yet know when the ETF will go public. They won’t know the exact timing of the listing until the SEC gives them a deadline to file final documents.

The SEC placed the blame for the listing of the Ethereum ETF on the applicants, claiming that the process was entirely dependent on their response time.

Bloomberg ETF analyst Eric Balchunas posted on the Just some very slight adjustments), and from what I heard, next week will be relatively idle due to the holidays, and the approval process will be resumed on July 8, and then they will start listing U.S. Securities soon.”

Exchange Commission (SEC) Chairman Gary Gensler recently stated that he expects to see a spot Ethereum ETF listed as early as September.

The importance of the listing of Ethereum ETF

Galaxy Research stated in a report that once the Ethereum spot ETF is approved for trading, monthly net inflows may reach US$1 billion.

It predicts that the net inflow of ETH ETF will reach 20-50% of the net inflow of BTC ETF in the first five months, and Galaxy’s target is 30%, which means a monthly net inflow of US$1 billion.

Meanwhile, Galaxy warned that spot Ethereum ETF demand may be limited due to the lack of staking rewards.

Outflows from the Grayscale Ethereum Trust (ETHE) may also be a drag on Ethereum ETF inflows, with Galaxy estimating that these negative outflows could reach approximately 319,000 ETH or $1.1 billion per month.

Bitwise believes that $15 billion in capital inflows in the next 18 months is a good start. The agency considers ETH to be a compelling asset powering the world’s most versatile blockchain. Even $15 billion in net new demand would have a huge impact on the Ethereum market.

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