The SEC has thrown a curveball into the approval process for Ethereum ETFs by returning their S-1 forms to issuers. These spot Ethereum ETFs, which were initially expected to launch next week, will now face further delays as the SEC has requested amendments to the S-1 forms filed by issuers.
So…what’s next?
Problems with the approval process
According to Bloomberg senior ETF analyst Eric Balchunas and other experts, the launch of a spot Ethereum ETF was expected to happen next week, but recent feedback from the SEC pushed this timeline back: the form was returned with a request for minor adjustments, and the issuer was required to resubmit an updated form in response to the comments.
This suggests that final approval may be delayed, with at least one more application expected before these ETFs can begin trading.
Fix deadline: July 8th
In its latest notice, the SEC set a deadline of July 8 for the revised S-1 form. The S-1 form is a key component of a two-step process that an ETF must complete before it can begin operations. The first step, approval of the issuer’s 19b-4 form, was completed in May. However, no deadline has been set for the S-1 form, leaving issuers to rely on the SEC’s review timeline.
Impact on scheduled transaction dates
Previously, there were indications that the Spot ETH ETF could begin trading by July 4th. However, given the latest developments, this seems unrealistic. SEC Chairman Gary Gensler recently suggested that approval could happen this summer, but did not give a specific date, leaving issuers and investors in a state of uncertainty. The SEC’s request for minor changes to the S-1 form suggests that while there are no major issues, these adjustments are necessary to meet compliance standards.
The SEC’s decision has drawn criticism from market participants as Ethereum in particular and the cryptocurrency market as a whole faces downward pressure. The price of ETH has fallen by more than 1% in the past 24 hours, while trading volume has fallen by 8% in the same period, reflecting a decline in trader interest.
Future outlook
Despite the current obstacles, the approval process for spot Ethereum ETFs is ongoing, with issuers such as BlackRock, Fidelity, 21Shares, Grayscale, Franklin Templeton, VanEck, iShares and Invesco working to meet the SEC’s requirements. The market will need to wait for further updates on when these ETFs will eventually appear on trading floors.
Also read: Urgent Alert: Bitcoin Could Crash to $55,000 – Here’s Why?
