- SEC chair Gary Gensler said the spot Ethereum ETFs will be approved in the course of the summer.
- The SEC has already greenlit a crucial batch of documents.
- Odds of the ETFs launching on July 4 have plummeted on Polymarket.
Spot Ethereum exchange-traded funds are likely to launch this summer.
That’s what Securities and Exchange Commission chair Gary Gensler told US senators today during a hearing on the agency’s funding request for 2025.
“I would envision sometime over the course of this summer,” Gensler said.
The SEC has already greenlit a batch of documents necessary for the launch of Ethereum ETFs, called 19b-4s, but still needs to get a second set of filings, called S-1s, finalised with prospective ETF issuers.
It’s only once both sets of documents are completed that the SEC can officially approve the ETFs — and subsequently launch the products.
“Individual issuers still are working through the registration process,” Gensler said. “That’s working smoothly.”
Ether didn’t react to the news. The second largest cryptocurrency by value is down 4.4% in the last 24 hours, and trading for $3,450.
Market expectations
On betting platform Polymarket, odds that the ETFs will begin trading on July 4 have shot down 15% in the wake of Gensler’s comments.
Bettors now believe there’s a 29% chance the products will launch on Independence Day.
And two weeks ago Bloomberg Intelligence ETF analyst Eric Balchunas said that there was a “legit possibility” the ETFs could launch by the end of June, though he ascribed more chances to July 4.
Approval process
The Ethereum ETF approval process has differed markedly from the Bitcoin ETF approval process.
The SEC started communicating early on with prospective Bitcoin ETF issuers to get both 19b-4 filings and S-1 filings finalised at the same time. The agency then officially approved the funds on January 10, and they launched the next day.
In the Ethereum ETF’s case, however, prospective issuers only got radio silence from the SEC as a crucial May 23 deadline for 19b-4s loomed closer, leading analysts to believe the ETFs would get rejected.
However, on May 20 the SEC began frantically communicating with ETF issuers to get their 19b-4 filings in order before the deadline hit.
The SEC’s shift was likely politically motivated, Galaxy Digital CEO Mike Novogratz told CNBC at the time.
But because the agency’s change of heart was so unexpected, its division of Corporate Finance, which takes care of S-1 filings for prospective ETFs, was likely caught off guard. So the S-1 process, which took four months for the Bitcoin ETFs, may have only started three weeks ago.
The paperwork isn’t expected to take as long for Ethereum ETFs, however, since a lot of the kinks for offering spot crypto ETFs were already worked out when the SEC tackled the Bitcoin ETFs.
Nine different ETFs — issued by BlackRock, Fidelity Investments, Grayscale Investments, VanEck, Invesco and Galaxy Digital, ARK Invest and 21 Shares, Hashdex, Franklin Templeton, and Bitwise — will likely launch.
Tom Carreras and Jo Wright write about markets and regulation for DL News. Got a tip about Ethereum ETFs? Reach out at tcarreras@dlnews.com or joanna@dlnews.com