ETH Price Plunges as SEC Delays Approval of Ethereum ETFs
Ethereum (ETH) experienced a drop in price, falling back to the $3,400 support level after briefly surpassing the $3,500 mark. This setback is attributed to the delay in full approval by the Securities and Exchange Commission (SEC) for Ethereum ETF applications, which have now been postponed until July 8.
Initially, analysts expected approval by July 2, but the SEC has requested issuers to submit revised filings by July 8, leading to a revised timeline. The SEC Chair, Gary Gensler, had previously indicated that Ethereum ETFs were likely to receive approval by the end of the summer. The SEC is currently reviewing and approving S-1 forms, which are the second step in launching spot Ethereum ETFs.
Despite the delay, asset managers remain optimistic about the SEC greenlighting the first US spot Ethereum ETF applications that directly invest in Ether. Expectations are set for mid-July, and a recent Bloomberg report highlighted the constructive dialogue between asset managers and the regulator.
The regulator’s feedback provided minor questions that issuers are currently addressing. Steve Kurz, the head of asset management at Galaxy Digital, predicted the approval of an Ethereum ETF within the next couple of weeks, expressing confidence in the process based on their experience with the Bitcoin ETF.
Several prominent firms, including BlackRock Inc., Fidelity Investments, 21Shares, and Invesco, have filings awaiting approval. However, the disclosure of fees on the respective funds is a necessary step before trading can commence.
Assuming the funds receive approval, the question arises whether Ether portfolios will generate a similar level of demand as the historic debut of US spot-Bitcoin ETFs in January, which accumulated $52 billion in assets.
According to Bitwise’s Chief Investment Officer (CIO), Matt Hougan, Ethereum ETFs could attract significant inflows in the first few months of trading, although they may not reach the same volume of inflows as the newly approved Bitcoin ETF market. Hougan projected that these ETFs could see $15 billion in net inflows within their first 18 months of trading, considering the market capitalizations of Bitcoin and Ethereum and the allocation of investors to their respective exchange-traded products (ETPs).
At present, ETH is trading at $3,418, experiencing losses of over 9% in the monthly timeframe.