As a seasoned crypto investor with a few years under my belt, I’ve learned to keep a level head during times of market uncertainty. The potential approval of a spot Ethereum ETF by the SEC is an exciting development, but it’s important to remember that approval and launch are two different things.
The market for Ethereum ETFS is nearly stalled in anticipation of the SEC’s decision on approving a spot-based Ethereum ETF in the United States. A significant point of contention raised by Bloomberg Senior ETF Analyst James Seyffart revolves around the estimated launch time following the approval process.
When Will Spot Ethereum ETF Start Trading?
Based on current circumstances, the probability of the Ethereum ETF being approved by the SEC is significantly higher than 75%. The SEC staff has reportedly signaled their intent to approve this product to cryptocurrency exchanges. However, it’s essential to note that approval does not automatically mean the launch of the ETF. Seyffart made it clear that these are separate processes.
He brought up a previous post he had made, which outlined the sequence of approvals involving 19b-4s and S-1s. With VanEck’s deadline falling on May 23rd, there is much speculation as to whether this timeline allows for trading to begin. In his explanation, Seyffart mentioned that securing approval for the asset manager’s 19b-4 could meet the deadline. However, obtaining approval for an S-1 might take anywhere from several weeks up to months.
Reminding everyone about this Ethereum ETF discussion: Misconceptions exist that ‘approval’ equates to an immediate launch. However, it’s essential to note that there could be days, even weeks or months, separating the approval process from the actual launch of these ETFs on #Ethereum.
— James Seyffart (@JSeyff) May 21, 2024
When it comes to the approval of a Bitcoin ETF, the processing of Form S-1 and 19b-4 occurred nearly at the same time. This sequence of events may have led to some confusion in the market during that period. However, as pointed out by Seyffert in his submission, there will be a minimum time gap between the SEC’s approvals and the actual launch of the products.
James Seyffart explains that one reason for the potential significant delay between regulatory approval and launch is the requirement for ongoing dialogue between the Securities and Exchange Commission (SEC) and all relevant parties. This back-and-forth communication between the SEC and applicants, which commenced this week, previously took several weeks during the process of approving a spot Bitcoin Exchange-Traded Fund (ETF).
Getting Ready
As a researcher studying the developments surrounding the SEC and potential Ethereum ETF applicants, I can share that the intricacies of how the SEC will engage with these applicants remain somewhat uncertain. Nevertheless, numerous prospective issuers are preparing for this regulatory process in various ways. One such approach is by revising their applications to remove any contentious clauses that could potentially provoke controversy with the US Securities and Exchange Commission.
The markets regulatory body is believed to be unfavorable towards staking products within the Ethereum marketplace as a whole. Consequently, potential issuers such as Grayscale Investments and Fidelity Investments have eliminated this feature in their amended Ethereum ETF applications.
The market remains confident that a spot Ethereum Exchange-Traded Fund (ETF) will be approved, and the price of Ethereum (ETH) reflects this positive outlook so far.
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2024-05-22 00:45