Another milestone: Ethereum ETF interpretation and operation suggestions
$ETH The key obstacle of spot ETF has been eliminated and will eventually be approved; ETH may "buy expectations and sell facts".
I. Explanation
1. Form 19b-4: refers to the proposal for a change in the exchange rules to allow ETFs to be traded on stock exchanges. The approval of this form means that ETFs are allowed to be listed on the New York Stock Exchange, Chicago Board Options Exchange and Nasdaq.
2. S-1 document: refers to the prospectus of the ETF. After the US SEC signs the final version of the issuer's S-1 document, the ETF may start trading on the next business day.
3. Usually the S-1 document is approved after 19b-4, and it is possible that both are approved at the same time.
II. ETH spot ETF
1. The US SEC has approved the 19b-4 forms of multiple ETH spot ETFs, eliminating a key obstacle to ETH spot trading in the United States, but has not yet fully approved ETF trading.
2. Trading can begin after the U.S. SEC signs and approves the final version of the issuer's S-1 document. Currently, the U.S. SEC has only recently started to talk with issuers about the S-1 form, and no deadline has been set. Historically, the deadline may be a few weeks or more than 3 months.
III. Suggestions
1. VanEck, the first applicant, has submitted an amendment to the S-1 document. Based on historical experience, the ETH spot ETF will eventually be approved for trading.
2. During the period before the final approval, ETH may continue to rise; after approval, Grayscale's holding of approximately 2.93 million ETH may replicate the trend after the approval of the Sugar Orange ETF, and there will be a certain amount of selling.
3. Before approval, under the high probability of approval, ETH has a large room for catch-up, and it is recommended to be cautious in shorting; after the approval, it is recommended to buy in batches at lows; in the medium and long term, when $BTC and $ETH also have spot ETFs, at the current position, ETH may have more room for growth than BTC.
