ethereum enthusiasts were cruising down the information superhighway toward a Fourth of July fireworks celebration of a different kind: the launch of the first ethereum spot ETF.
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But in a decision that worried investors, the U.S. Securities and Exchange Commission put a major hurdle in the process, unexpectedly returning applicants' proposals and delaying the long-awaited debut.
Failed exit: July ethereum ETF launch fizzles out
The news came as a surprise to many, as market observers and analysts alike had confidently predicted a technology/us-regulators-could-approve-spot-ether-etfs-launch-by-july-4-sources-say-2024-06-26/” target=”_blank” rel=”nofollow”>July releaseand some even suggest a celebratory exchange on Independence Day.
Bloomberg ETF analysts Eric Balchunas and James Seyffart were among those a little early in waving the checkered flag. His prediction of a July 2 debut vanished faster than a Roman candle after the SEC decided to put the brakes on the process.
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Unfortunately, I think we'll have to postpone our over/under until after the holidays. It looks like the SEC took some extra time to get back to people this week (albeit again with minor adjustments) and from what I hear, next week is closed because the holiday is July 8th, the process resumes and shortly after that they'll be releasing… https://t.co/0ZQR7yiBLt
— Eric Balchunas (@EricBalchunas) twitter.com/EricBalchunas/status/1806810886109331520?ref_src=twsrc%5Etfw” rel=”nofollow”>June 28, 2024
Insiders say the SEC has delayed the expected debut date by requiring changes to the S-1 paperwork that issuers have filed. This unexpected detour raises serious concerns about the schedule as a whole. Although there are others who anticipate the authorization for July 8, the impending holiday in the United States probably adds another level of difficulty.
Uncharted Territory: SEC Takes the Helm
The lack of a definitive timeline is a major source of frustration for both investors and issuers. Unlike previous Form 19b-4s, which required a specific deadline for the SEC's decision, the S-1 filing process gives the regulatory body the freedom to take its time. This essentially hands the steering wheel to the SEC, allowing it to request revisions and conduct a thorough review without the pressure of a clock.
While the president of the SEC ethereum-etf-review-going-smoothly” target=”_blank” rel=”nofollow”>Gary Gensler Although he has previously hinted at approvals “sometime this summer,” his comments have not offered much comfort to the nervous market. The recent issue with S-1 forms indicates that even a summer launch might be too optimistic. This lack of clarity is a major hurdle for issuers and creates uncertainty for investors eager to jump on the ethereum ETF bandwagon.
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The road ahead
Even if ethereum ETF If they eventually make it to the finish line, experts predict that they might not attract the same level of investment as their bitcoin counterparts. bitcoin's lower perceived volatility, coupled with the already established bitcoin ETF landscape, could make them a more attractive option for some investors.
The SEC’s recent actions have thrown the timeline out of whack and left investors and issuers in limbo. While approval could happen “sometime this summer,” the lack of clarity and the possibility of lower inflows compared to bitcoin ETFs paint a picture of a bumpy road ahead for these highly anticipated investment vehicles.
Featured image from Pexels, chart from TradingView
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