Ethereum (ETH) price has faced a decline after briefly breaching the $3,500 mark on Monday, falling back to the $3,400 support level on Tuesday. The delay is due to the expected full SEC approval of Ethereum ETF filings, which have now been postponed to July 8.
SEC requests amended documents
Analysts initially expected approval by July 2, but the SEC asked issuers to submit revised documents by July 8. Bloomberg ETF expert Erich Balchunas said on social media that the SEC needed more time to provide feedback, which resulted in the revised timeline. Balchunas he stated:
Unfortunately, I think we’ll have to push our over/unders to after the holidays. It looks like the SEC needed extra time to get back to people this week (although again very lithe adjustments) and from what I’ve heard, next week is dead because the holidays = July 8th, the process will resume and they’ll be up and running shortly after that
SEC Chairman Gary Gensler has previously indicated that Ethereum ETFs are likely to receive approval “by the end of the summer.” The SEC is currently reviewing and approving S-1 Formswhich represent the second step towards the launch of spot Ethereum ETFs.
Despite the delay, asset managers remain hopeful about the SEC’s decision to greenlight the first US-based spot Ethereum ETF applications that directly invest in Etherwith expectations set for mid-July. A recent Bloomberg report highlighted the constructive dialogue between asset managers and the regulator.
Ethereum ETF launch is getting closer
According to reportfeedback from the regulator provided some minor questions that issuers are currently addressing. In May, the SEC approved the exchanges’ proposal to list these products, requiring separate approval to launch them.
Steve Kurz, head of asset management at Galaxy Digital, predicted approval of an Ethereum ETF in the next few weeks. Galaxy Digital has filed for an Ethereum ETF, and Kurz expressed confidence in the process, emphasizing his familiarity with the requirements based on his experience with Bitcoin ETF.
Several well-known firms, including BlackRock Inc., Fidelity Investments, 21Shares and Invesco, have documents pending. Disclosure of individual fund fees is a necessary step before trading begins.
Assuming the funds get the green lithe, one key question remains: Will Ether wallets generate a similar level of demand to the historic debut of US spot-Bitcoin ETFs in January, which raised $52 billion in assets?
$15 billion inflow in first 18 months
As previously reported According to NewsBTC, ETH funds could attract significant inflows in the first few months of trading, although they may not have the same volume of inflows as the recently approved Bitcoin ETF market.
In a note to investors, Bitwise Chief Investment Officer (CIO) Matt Hougan forecasts that these ETFs could see net inflows of $15 billion in their first 18 months of trading.
To arrive at this estimate, Hougan took into account the market capitalizations of Bitcoin and Ethereum, expecting investors to allocate funds to their respective listed products (ETP) proportionally.
Hougan noted that US investors have already invested $56 billion in the Spot Bitcoin ETP and predicts that this amount will reach $100 billion or more by the end of 2025.
Based on this reference, he determined that Ethereum Spot ETFs would need to attract $35 billion in assets to match Bitcoin ETFs, a process that could take about 18 months.
He further noted that Ethereum Spot ETFs will launch with $10 billion in assets, thanks to the conversion of the Grayscale Ethereum Trust (ETHE) into an ETF.
At the time of writing, ETH is trading at $3,418, having seen significant monthly declines of over 9%.
Featured image from DALL-E, chart from TradingView.com
