Spot Ether ETFs Near Approval, Could Attract $15 Billion

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In a significant development for cryptocurrency enthusiasts, a roster of eight spot Ether exchange-traded funds (ETFs) are inching closer to becoming a reality, though an exact launch date remains elusive, according to Katherine Dowling, Bitwise’s chief compliance officer.

Speaking to Bloomberg on July 9, Dowling noted, “We’re seeing in the S-1 amendments that there are fewer and fewer issues that are being vetted back and forth between issuers and the SEC. So that points all signs in the direction that we are close. We’re close to the finish line on the launch.” Form S-1s, crucial documents that provide information about the issuer and the securities they intend to offer, must be approved before the products can go live.

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The anticipation heightened recently when SEC Chair Gary Gensler hinted that the spot Ether ETFs might launch in the summer. “Everyone has a different definition of summer. It’s been a little bit of a long, hot summer for the issuers waiting,” Dowling added, encapsulating the cautious optimism surrounding the launch.

Several spot Ether ETF issuers have been in a holding pattern for approximately six weeks, waiting for the SEC to sign off on their S-1 registration statements. This delay follows the regulator’s approval of several 19b-4 filings on May 23. The issuers submitted their amended S-1s in early July after receiving initial feedback from the securities regulator.

Bitwise’s chief investment officer, Matt Hougan, speculated that these spot Ether ETFs could attract up to $15 billion in inflows within the first 18 months of trading. This projection mirrors the performance of spot Bitcoin ETFs, which have accrued a similar amount since their launch six months ago.

Adding to the intrigue, Dowling disclosed that the SEC has been open to discussions about products beyond Bitcoin and Ether. “We’ve actually dialogued with the SEC about the possibility of what’s coming down the pipe with new products. I think our communication with the SEC about the prospects for these products has actually been quite welcoming,” she remarked.

In an extension of this openness, the Chicago Board Options Exchange (CBOE) filed applications on July 8 to list spot Solana (SOL) ETFs on behalf of VanEck and 21Shares. However, Dowling expressed skepticism that a third spot cryptocurrency ETF would be approved under Gensler’s tenure, a sentiment echoed by senior Bloomberg ETF analyst Eric Blachunas. Blachunas suggested that a spot Solana ETF application might be “dead on arrival” if President Biden is re-elected and Gensler remains at the helm of the financial regulator.

As anticipation builds and discussions continue, the crypto community remains on edge, awaiting the official go-ahead that could significantly alter the landscape of digital asset trading.