Countdown to Launch: Ethereum ETFs Poised for Mid-July Debut

TLDR

• Bitwise has filed an amended S-1 registration for its Ethereum ETF ahead of the July 8 deadline.
• Analysts predict Ethereum ETFs could begin trading in mid-July.
• The SEC approved 19b-4 forms for eight spot Ethereum ETFs on May 23, but final S-1 approvals are still pending.
• Several ETF issuers, including Bitwise, are offering fee waivers to attract initial investors.
• The SEC’s comments on the latest filings have been minimal, suggesting a launch may be imminent.

The launch of spot Ethereum exchange-traded funds (ETFs) appears to be on the horizon.

Bitwise, a leading asset management firm, has recently filed an amended S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) for its Ethereum ETF, signaling that the product is nearly ready for launch.

This latest development comes just days before the July 8 deadline for such amendments. The move has sparked optimism among market analysts, who now predict that Ethereum ETFs could begin trading as early as mid-July.

The journey towards Ethereum ETFs began on May 23, when the SEC approved 19b-4 forms for eight spot Ethereum ETFs, including Bitwise’s offering. However, before trading can commence, issuers need their S-1 statements to become effective. This two-step process has kept investors and market watchers on their toes.

Bloomberg ETF analyst James Seyffart noted the frequency of S-1 form amendments, stating, “Expect more from other issuers throughout the rest of the week.” This pattern suggests a coordinated effort among ETF providers to meet regulatory requirements and prepare for a potential launch.

UPDATE: We’ve got another amended S-1 from @BitwiseInvest for their #Ethereum ETF. Expect more from other issuers throughout the rest of the week. We’re thinking these things could potentially list later next week or the week of the 15th at this point. pic.twitter.com/xqVlt9lSGy

— James Seyffart (@JSeyff) July 3, 2024

One notable aspect of Bitwise’s amended filing is the inclusion of a fee waiver. The firm plans to waive its management fee on the first $500 million its fund attracts during an initial period.

This move is not unique to Bitwise; other ETF hopefuls like Franklin Templeton and VanEck have included similar fee waivers in their filings. These strategies aim to lower entry barriers and attract initial investors in what is expected to be a competitive market.

The SEC’s response to these latest filings has been encouraging. Eric Balchunas, a senior ETF analyst at Bloomberg, reported that the last round of comments from the SEC were “literally nothing” and took no time to update.

This minimal feedback suggests that the regulator is largely satisfied with the current state of the filings, potentially paving the way for a smooth approval process.

However, some analysts have expressed surprise at the SEC’s pace. Despite the light comments, the regulator appears to be taking its time with final approvals.

No one really knows why the SEC is taking their sweet time with these, given how light comments were, these could have easily been trading by now. Could be one ‘problem’ issuer slowing down process or just summertime lazy/ppl on vaca. Not sure. That said, all indications launch…

— Eric Balchunas (@EricBalchunas) July 3, 2024

Balchunas speculated on possible reasons, including summer vacations or a potential “problem issuer” slowing down the process. Nevertheless, he confirmed that all indications still point to a launch this month.

The anticipation surrounding Ethereum ETFs has had a noticeable impact on the cryptocurrency market. Following the initial approval of 19b-4 forms on May 23, Ethereum’s price rallied to around $4,000. However, as the approval process has played out, the price has retreated to around $3,270 as of recent reports.

Looking ahead, the market is  awaiting the SEC’s final green light on the S-1 filings. Some sources suggest that the regulator might approve the final drafts by the end of next week, potentially setting the stage for trading to begin shortly after.