Crypto: Prolonged wait for Ethereum ETFs, SEC slow to react

Crypto industry players have their eyes on the US SEC as the wait for approval of Ethereum ETFs (exchange-traded funds) drags on. Since the submission of the first drafts of S-1 forms on May 31, the issuers of these ETFs have been on hold, awaiting comments from the SEC. While this bureaucratic slowness is frustrating, it is not unusual in the financial world. Let's explore the details of this situation and its implications for the cryptocurrency market.

An endless wait for comments from the SEC

The Ethereum ETF approval process is at a crucial stage. Issuers, having submitted their S-1 forms, expected to receive comments from the SEC around June 7.

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However, to date, no response has been received, leaving issuers in a situation of uncertainty. This wait is not just a matter of formalities, it also delays the launch of innovative financial products that could attract considerable investment.

Comments from SEC Chairman Gary Gensler on CNBC were not particularly reassuring. He mentioned that approving the S-1 forms “would take time,” without giving a specific timeline.

This adds an additional layer of frustration for issuers and potential investors. The question that arises is: how much longer will this situation continue? Reportedly, the S-1 forms may need two more rounds of revisions before they are ready.

Preparations for the launch of Ethereum ETFs

Despite the uncertainty, issuers are actively preparing for the launch of their Ethereum ETFs. These preparations are essential to ensure that, upon receipt of SEC approval, products can be quickly brought to market.

Form S-1 represents the second step in the approval process, the first being the approval of Forms 19b-4, obtained on May 23.

The draft filings also reveal some interesting details about future Ethereum ETFs. For example, BlackRock plans to launch its ETF with a starting capital of $10 million, while Franklin Templeton plans to start with a fee of 0.19%.

These figures show the extent of the preparations and the commitment of large financial institutions to this new product.

The big question is whether Ethereum ETFs will be able to replicate the success of Bitcoin ETFs. Since their launch, Bitcoin ETFs have attracted substantial investment flows, and expectations are high for Ethereum ETFs.

Jag Kooner, head of derivatives at Bitfinex, estimates that these new products could capture around 10-20% of flows going to Bitcoin ETFs. This estimate, although conservative, highlights the significant potential of Ethereum ETFs.

However, several factors could influence this success. One of them is how the SEC handles the approval process and associated deadlines. The longer the wait, the more impatient investors may become, seeking alternatives elsewhere. Additionally, market conditions and price development of the Ethereum crypto will also play a crucial role in attracting investments.

The next few months will be crucial to observe how this situation evolves and what impact it will have on the broader cryptocurrency market. The crypto industry, always dynamic and full of surprises, undoubtedly still has many interesting developments in store for us.

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