Trading is set to begin on July 23 for the newly SEC-approved spot Ethereum (ETH) ETFs
The approval process required issuers to finalize their S-1 documents by Wednesday, July 17, allowing the ETFs to debut on July 23. These new financial products are anticipated to attract substantial investment, with projections estimating inflows of up to $5 billion within the first six months and potentially up to $20 billion within the first year.
According to a recent report by Bybit, market trends and trading signals across spot trading volume, futures, options, and perpetual contracts show a growing bullish sentiment toward ETH compared to Bitcoin (BTC). This sentiment is reflected in ETH’s sustained volatility premium over Bitcoin, even amidst the recent market activity and sell-off.
Update: Nate's instincts were right, hearing SEC finally gotten back to issuers today, asking them to return FINAL S-1s on Wed (incl fees) and then request effectiveness on Monday after close for a TUESDAY 7/23 LAUNCH. This is provided no unforeseeable last min issues of course! https://t.co/D21FD9Qf94
— Eric Balchunas (@EricBalchunas) July 15, 2024
The report revealed a significant shift in investor sentiment between Ethereum and Bitcoin.
“I expect interest in ETH to grow over time as more investors now have access to it,” Eugene Cheung, Head of Institutions at Bybit told crypto.news in an interview.
Cheung highlighted the long-term bullish prospects of spot ETFs.
“In the short term, the market is pricing in an underwhelming response, but this is a bullish catalyst long-term. ETH may also offer diversification benefits in the long-term, given its different and more extensive set of use-cases vs BTC,” Cheung said.
Eight major issuers, including leading asset management firms, are preparing to launch Ethereum-based ETFs. The SEC’s preliminary approval of these products marks a significant advancement for the cryptocurrency industry following the successful introduction of spot Bitcoin ETFs earlier this year.
The price of Ethereum has responded positively to the news, increasing by over 12% over the last five days. The influx of investment from these ETFs is expected to influence Ethereum’s market dynamics.
Market implications and trader sentiment
Market analysts suggest that the introduction of spot Ethereum ETFs will drive immediate investment and support long-term growth due to increasing regulatory clarity and technological advancements within the Ethereum ecosystem.
“We have seen BTC ETFs used as a basis trade where traders have longed the ETF and shorted futures to capture funding rates,” Cheung said. “I imagine this trade could open up for ETH ETFs too in the future.”
An ETH ETF is a win for crypto, as it integrates digital assets into traditional financial markets and sets a precedent for future innovations.
