Asset managers are currently expressing optimism regarding the potential approval of the first U.S. ETFs directly investing in Ethereum by the Security and Exchange Commission (SEC), with expectations of approval possibly by mid-July. The SEC has given ETF applicants a deadline until July 8 to submit updated paperwork and amended S-1s, with potential additional rounds of filings to follow. Recent feedback from the SEC to issuers has consisted of minor questions that are currently being addressed. This has led some experts, such as Steve Kurz, head of asset management at Galaxy Digital, to predict that an Ether ETF could be approved within the next couple of weeks.
Despite the positive outlook, major asset managers like BlackRock, Fidelity, Ark 21Shares, and Invesco still have pending filings, with some issuers yet to disclose their fund fees. This step is crucial before trading can commence. Additionally, it remains uncertain whether Ethereum ETFs will attract similar demand to spot Bitcoin ETFs, which have seen significant asset accumulation since their launch in January. Analysts have predicted that Ethereum ETF flows could amount to only 10% to 15% of Bitcoin ETF flows, with the possibility of ETH prices falling by as much as 30% post-launch.
Contrary to some concerns, crypto research firm K33 Research anticipates that Ethereum may outperform Bitcoin in July. The firm views ETFs as a strong catalyst for Ethereum’s relative strength as the summer progresses and flows increase. Senior analyst Vetle Lunde from K33 Research suggests that current ETH/BTC prices are favorable for patient traders, indicating potential gains for Ethereum investors.
Bitcoin is currently facing selling pressure due to an upcoming distribution of nearly $9 billion worth of BTC related to the defunct Mt. Gox exchange. Meanwhile, Ethereum’s prices are showing a lack of positive momentum, with a 3% decline to an intraday low of $3,342 observed during Asian trading. Despite briefly surpassing $3,500 earlier in the week, Ethereum remains 17% below its 2024 peak and 31% below its all-time high from November 2021.
While asset managers are hopeful for SEC approval of Ethereum ETFs, challenges remain in terms of fund fees, market demand, and price fluctuations. It is essential for investors to carefully monitor developments in the ETF approval process and market conditions to make informed decisions regarding Ethereum investments.
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