The US Securities and Exchange Commission (SEC) is inching closer towards the approval of the latest adjustments regarding spot Ethereum ETFs, with the discussions between asset managers and regulators nearing their conclusion. Prominent asset managers like BlackRock, Franklin Templeton, and Grayscale Investments are among the eight firms progressing towards the final stages. This development comes after several of these firms successfully launched spot Bitcoin ETFs in January, following years of grappling with regulatory hurdles. Grayscale Investments is now looking to transition an existing trust into an ETF.
Industry insiders have informed Reuters that the process of amending the necessary documents has advanced significantly, with only minimal issues remaining to be resolved before the funds can be launched. A lawyer closely involved with the matter has indicated that approval is likely only a week or two away. Speculations align with forecasts made by Bloomberg’s ETF analyst Eric Balchunas, who suggested the potential approval of the spot Ethereum ETF by July 2nd, just before the July 4th US holiday. Despite the general anticipation surrounding the launch, the SEC and its Chair Gary Gensler have not divulged specific details. Gensler recently expressed his optimism about approving these investment vehicles during the summer but refrained from providing a concrete timeline.
Bitwise, a notable player in the cryptocurrency market, predicts that spot Ethereum ETFs could attract more than $15 billion in net inflows within the initial 18 months of their operations in the US. This estimate is based on data from Bitcoin ETFs and the relative market size of Ethereum compared to Bitcoin. The current market capitalization of Bitcoin stands at around $1.26 trillion, while Ethereum’s market cap is $432 billion, reflecting a 3:1 ratio. A significant portion of Bitcoin’s market cap, approximately $56 billion, is allocated to spot Bitcoin ETFs in the US. Bitwise’s CIO, Matt Hougan, believes this figure could double to $100 billion by the end of 2025.
The imminent approval of spot Ethereum ETFs by the SEC represents a significant milestone in the mainstream adoption of cryptocurrencies and digital assets. With leading asset managers actively involved in the process and optimistic market projections, the investment landscape is poised for a transformation with the introduction of these innovative financial products.