Bloomberg Analyst Eric Balchunas Speculates Launch of Spot Ether ETFs by July 2

As the United States inches closer to the launch of spot Ether exchange-traded funds (ETFs), according to Bloomberg ETF analyst Eric Balchunas, we may witness these ETFs hitting the market as early as July 2. 

Makes sense. What I heard: issuers still waiting to get comments from Corp Fin on S-1s which they handed in 2wks ago. Corp Fin is just looking at these docs for first time (why? bc of the (highly likely) political last min 180 (remember they were as surprised by this as anyone… https://t.co/N32N6jFXBv

— Eric Balchunas (@EricBalchunas) June 13, 2024

What does this development mean for Ethereum investors and the broader crypto industry?

Spot Ether ETFs represent a significant milestone for the crypto industry. These investment vehicles allow investors to gain exposure to Ethereum without directly holding the cryptocurrency. Unlike futures-based ETFs, which derive their value from contracts, spot ETFs track the actual price of Ether on exchanges. This distinction is crucial because it provides a more direct link to the underlying asset.

SEC’s Green Light and Balchunas’ Speculations 

On May 23, the U.S. Securities and Exchange Commission (SEC) approved eight 19b-4 filings for spot Ether ETFs on various U.S. exchanges, including Grayscale, Bitwise, iShares, VanEck, Ark Invest, Invesco, Fidelity, and Franklin Templeton, are among the approved applicants. However, there’s a catch: these ETFs can only start trading once they receive the necessary S-1 registration statement approvals. 

In a Senate Banking Committee hearing on June 13 about President Joe Biden’s 2025 budget requests for the SEC, Gensler said he expects the commission to approve S-1 registration statements for asset managers “sometime this summer.”

Eric Balchunas at Bloomberg, known for his insightful analysis, has been closely monitoring the regulatory landscape. His recent update suggests that the SEC’s comments on the ETF applicants’ S-1 applications were “pretty light, nothing major.” The SEC requested responses from the applicants within a week, indicating a positive outlook. Balchunas believes there’s a “decent chance” that the SEC will declare the ETFs effective shortly, possibly before the holiday weekend leading up to U.S. Independence Day.

Gary Gensler’s Rather Broader Timeframe

SEC Chair Gary Gensler has also weighed in on the matter. He provided a broader timeframe, hinting that spot Ether ETFs might begin trading within the next three months, potentially by the end of September. However, just a week earlier, Gensler emphasized that the speed of approvals would depend on how quickly issuers addressed the SEC’s comments. It’s a delicate balance between regulatory scrutiny and market demand.

Ethereum’s Price Potential

Investors keenly observe Ether’s price movements. Will it follow Bitcoin’s trajectory after the approval of its ETF? Bitcoin’s ETF approval triggered a surge in January, propelling its price to record highs. For instance, you’ll recall that when BlackRock filed for a Bitcoin ETF on June 15, 2023, Bitcoin’s price jumped approximately 22% within a week. As of this month, Bitcoin’s price has been exhibiting a positive trend. The year-to-date increase is around 60.41%, with a 161.37% rise over the past year. The current price of Bitcoin is approximately $66,217, according to data from TradingView, at the time of this writing.

However, Balchunas remains cautious. He points out that Ether’s use cases are more complex to evaluate than Bitcoin’s. While some traders remain optimistic, others recognize the need for widespread consensus on Ethereum’s utility and utilization rate.