There is still uncertainty about the date of the actual listing on the stock exchange of spot Ethereum ETFs in the USA, but the chances that this may happen by the end of the month seem to be increasing.
There are indeed many experts and analysts who expect the definitive landing as early as next week, or in any case within the following two weeks.
The hypothesis of Galaxy Digital on the imminent approval of Ethereum ETFs
Yesterday Bloomberg interviewed the head of asset management at Galaxy Digital Ether ETF, Steve Kurz, who stated that spot Ethereum ETFs are very likely to be definitively approved by the SEC in the current month of July.
According to Kurz, the requests are currently in a phase of “window dressing”.
The expert from Galaxy Digital reminded that the SEC has already done this before, and despite being almost identical products to those already approved in January on Bitcoin, he called it a way to embellish the procedure.
It should be noted that Galaxy Digital is one of the eight companies that has applied to the SEC to issue a spot Ethereum ETF, along with BlackRock, Franklin Templeton, VanEck, Fidelity, iShares, Grayscale, and 21Shares.
All have already received authorization to list the shares of their ETFs on ETH on the stock exchange, but before they can actually be listed and made tradable, they must receive authorization for the S-1 form.
The window dressing
In the financial sector, “window dressing” refers to the practice of embellishing a portfolio or a balance sheet, for example, by selecting or modifying certain information, in order to make them appear more attractive or better performing.
For example, in the case of investment portfolios, positions are carefully chosen to present in such a way as to make the portfolio appear more diversified or with better returns.
Obviously, it is considered a deceptive practice, or at least not very transparent, because it creates false expectations or gives a distorted image.
In this specific case the SEC needs somehow to present these ETFs as something positive, given that for years it has stood against both Ethereum and crypto ETFs.
Last year it took a court ruling to force the SEC to approve the spot Bitcoin ETFs, as it had always rejected them in the past, making a mistake.
This year, however, it is likely that a diktat has come from above, given that it is still a government agency and in a year of presidential elections, evidently the candidate running again (Joe Biden) wanted to avoid irritating investors and the markets.
So in this specific case, window dressing might not be entirely misleading, even if it involves making formal changes to the requests to make them appear more in line with the expectations of the SEC.
The landing on the USA stock exchange of Ethereum ETFs
In the case of spot Bitcoin ETFs, the actual listing on the stock exchange occurred the day after approval.
In the case of spot Ethereum ETFs, only the requests have been approved for now, but the procedure is not complete. It is necessary for the SEC to also approve the final form, the S-1, which the various applicant companies have already submitted.
Tomorrow is the 4th of July, and in the USA it is a national holiday.
Friday it is unlikely that the SEC can meet for final approval, also because before it can do so the window dressing phase must be completed.
It was expected that the final approval could arrive on Monday, but in the current state, perhaps it is already a lot if it manages to arrive next week.
What is certain, however, is that once the final overall approval is obtained, the issuing companies will race to list their ETFs on the stock exchange as quickly as possible, and this means that the listing should take place the day after the definitive approval.
The forecasts
In reality, the main uncertainty is the one concerning the potential success of these new financial products on the USA stock exchanges.
In the case of Bitcoin in January, the success was resounding, so much so that the price of BTC went from $45,000 to over $70,000.
Instead, in the case of Ethereum, a much more moderate success is expected, although to be honest, the markets seem to be skeptical about a true and proper success of these ETFs on ETH spot.
The options market on ETH currently shows a positive sentiment regarding the launch of ETFs in the medium/short term, as happened for Bitcoin, but at this moment the Ethereum spot market does not show any bull signs.
There is therefore a discrepancy, with on one side the spot market that does not seem to be optimistic, while on the other side the derivatives market seems to be.
The only certain thing is that there is no sign of true and proper euphoria.
At this point, it is possible to imagine that something similar to what happens in January after the actual stock market debut of the new spot BTC ETFs occurs. That is, a drop in the weeks immediately following, lasting less than 30 days, and then a rebound.
The sales
The problem is that with the actual landing on the stock exchange, two waves of selling could be triggered.
The first is that of those who will do the classic sell-the-news, after having done the buy-the-rumors, given that the news of the approval is not yet 100% certain.
The second, much more dangerous, is that of the Grayscale Ethereum Trust, which just like the Grayscale Bitcoin Trust could be forced to liquidate a large part of the underlying (ETH) once transformed into an ETF and listed on the stock exchange.
In January this dynamic lasted less than two weeks, also because then the other ETFs started buying more BTC than Grayscale was liquidating.
So if the actual listing on the stock exchange of spot Ethereum ETFs should take place around mid-July, it is possible to imagine a drop in the price of ETH until the end of the month, and then perhaps a rebound in August.