Ethereum enthusiasts have been walking down information highway toward a July 4th celebration of fireworks of a different kind: the launch of the first Ethereum ETF.
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But in a move that worried investors, the US Securities and Exchange Commission issued a major challenge to the works, abruptly withdrawing the applicants’ proposals and delaying the much-anticipated debut.
A Missed Deal: Ethereum ETF’s July Launch Goes Up In Smoke
The news came as a shock to many, as market watchers and analysts alike had confidently predicted a July launch, with some even suggesting happy trading on Independence Day.
Bloomberg ETF analysts Eric Balchunas and James Seyffart were among those waving the checkered flag early. Their July 2nd debut prediction went up in smoke faster than a Roman candle after the SEC decided to put the brakes on the process.
Sad to think we’ll have to postpone our over/under until the end of the holiday. It sounds like the SEC took extra time to get back to ppl this wk (altho and the tweaks are very simple) and from what I hear the next wk is dead bc holiday = July 8th the process starts all over again and soon after that they will introduce…
— Eric Balchunas (@EricBalchunas) June 28, 2024
Insiders say the SEC delayed the expected start date by requesting changes to S-1 filings filed by issuers. This unexpected disruption raises serious concerns about the schedule as a whole. While there are still others awaiting approval on July 8, the approaching US holiday is likely to add another level of difficulty.
Unbeaten Zone: The SEC Takes the Wheel
The lack of a definitive timeline is a major source of frustration for investors and issuers alike. Unlike previous 19b-4 forms, which mandated a fixed SEC deadline, the S-1 filing process gives the governing body the freedom to take its sweet time. This essentially hands the steering wheel over to the SEC, allowing them to request a review and conduct a comprehensive review without the pressure of a ticking clock.
Although SEC Chairman Gary Gensler previously hinted at approval “sometime this summer,” his comments did not provide much comfort to the jittery market. The recent snafu with S-1 forms shows that even the summer launch may be overly optimistic. This lack of transparency is a major obstacle for issuers and creates uncertainty for investors willing to jump on the Ethereum ETF bandwagon.
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The Way Forward
Even if Ethereum ETFs finally reach the finish line, experts predict that they may not attract the same level of investment as their Bitcoin counterparts. Bitcoin’s perceived low volatility, combined with the already established Bitcoin ETF landscape, may make it an attractive option for some investors.
Recent actions by the SEC have disrupted the timeline, leaving investors and issuers in a state of confusion. Although approval is still possible “sometime this summer,” the lack of transparency and the possibility of lower penetration compared to Bitcoin ETFs paint a picture of a difficult journey ahead for these highly anticipated investment vehicles.
Featured image from Pexels, chart from TradingView
