The highly anticipated launch of spot Ether exchange-traded funds (ETFs) in the United States has hit a snag. The US Securities and Exchange Commission (SEC) has delayed its review process, pushing the initial launch date beyond the previously expected timeframe of early July.
Bloomberg ETF analysts Eric Balchunas and James Seyffart report that the SEC is taking a more cautious approach, requesting additional time to review the S-1 forms submitted by hopeful Ether ETF issuers. This additional scrutiny has pushed back the launch window to mid-July at the earliest, and potentially even later.
The SEC’s comments on the S-1 forms, accompanied by a request for resubmission by July 8th, are the key drivers behind the delay. Analyst Balchunas predicts this could postpone the launch of spot Ether ETFs until mid-to-late July. However, there’s a glimmer of hope. ETF Store president Nate Geraci believes the revisions requested by the SEC are minor, suggesting a potential green light for trading within 14-21 days after resubmission. While the exact timeline remains uncertain, the SEC has hinted at a possible summer launch.
This delay comes as a surprise considering Balchunas’ earlier prediction of an early July launch based on the initial lack of significant SEC commentary on the applicants’ S-1 filings.
The approval of the S-1 forms represents the second act of a two-part play for these Ether ETFs to reach the market. The first act concluded in May with the SEC’s approval of the issuers’ 19b-4 forms. Eight ETF hopefuls received the green light on May 23rd, clearing this initial hurdle.
Unlike the time-bound 19b-4 forms, the S-1 forms operate on a more open-ended timeline. This means the launch date hinges on the SEC’s review and approval process.
Positive Signals Amidst Delays
Despite the delay, there have been positive signals from the SEC. Chair Gary Gensler confirmed on June 26th that the overall approval process for spot Ether ETFs is progressing smoothly. Additionally, the SEC greenlit a rule change, allowing major investment firms like BlackRock, Fidelity, 21Shares, Grayscale, Franklin Templeton, VanEck, iShares, and Invesco to participate in the process.
Furthermore, issuers like VanEck have proactively filed 8-A forms, indicating their intent to list on exchanges by July 8th.
However, Gensler tempered expectations by suggesting the actual listing on stock exchanges could take months, potentially pushing back the final launch date to September. He emphasized that the onus lies with the applicants, as the process depends heavily on their response times to the SEC’s requests.
The SEC’s decision to delay the launch of spot Ether ETFs highlights the delicate balancing act they face. While fostering innovation in the digital asset space, they must also ensure investor protection and market stability. The additional scrutiny demonstrates the SEC’s commitment to a thorough review process, aiming to ensure these ETFs meet regulatory requirements before hitting the market. While the delay might frustrate some investors, it could ultimately lead to a more robust and secure launch for these highly anticipated Ether ETFs.