It’s been reported that six applicants for spot Ethereum ETFs have updated their S-1 forms, hinting at a potential SEC approval in the next few days.
Back in May, the SEC cleared 19b-4 applications from eight asset managers to trade Ethereum ETFs, with experts at the time suggesting that final approvals – the approval of S-1 registration statements – would come at the start of July.
However, this final stage of approvals, which the asset managers need to begin trading, is reportedly taking longer than expected, with reports surfacing in the US that the SEC has requested amended S-1 filings in an attempt to expedite the review process.
Once the SEC does give the green light, drawing on the quantifiable impacts observed with bitcoin ETFs, the Ethereum community is optimistic about the transformative potential of its own ETFs.
“This approval is crucial for widening Ethereum’s exposure and integrating it into more diverse investment portfolios,” Billy Leung, investment strategist at Global X, said.
In a note shared with InvestorDaily, Leung elaborated that these ETFs are expected to open new channels for investors, blending traditional investment frameworks with digital asset exposure, which may enhance market stability and attract new investment.
Reflecting on the SEC’s approval of bitcoin ETFs back in January, Leung noted that capital inflows into bitcoin ETFs have had a measurable impact on market prices.
“Year to date bitcoin ETF inflows totalled approximately US$16.4 billion, with each billion dollars resulting in roughly a 3.7 per cent price increase,” he said.
“This relationship highlights how structured financial products like ETFs can have a significant influence on cryptocurrency markets by creating demand and increasing liquidity.”
According to Leung, if Ethereum attracts comparable ETF inflows, its market could experience similar positive shifts, with an estimated price increase of around 19.8 per cent based on projected inflows.
“Given Ethereum’s market cap is roughly 33 per cent of bitcoin’s, if Ethereum attracts proportional ETF inflows similar to bitcoin since the launch of US bitcoin ETFs, it could see a comparable positive effect,” said Leung.
“Assuming the price impact bitcoin experienced from US bitcoin ETF launches, projected inflows of around US$5.4 billion (i.e. 33 per cent of US bitcoin ETF inflows year-to-date) could potentially lead to a 19.8 per cent increase in Ethereum’s price.
“This increase would be driven by rising demand, enhanced liquidity, and broader investor participation, potentially raising Ethereum’s price to approximately US$3,716.”
Previously, Global X Australia observed the US is “actually behind the eight ball” when it came to Ethereum ETFs, given such offerings were launched in Europe in 2017 and in Canada in 2021.
In 2022, Ethereum ETFs were made available in Australia with the Global X 21Shares Ethereum ETF (Cboe: EETH). Since its launch, EETH has garnered $22.6 million in investor funds.
According to Global X’s latest ETF market update, the best-performing ETFs over the past year have been cryptocurrency ETFs, including those for bitcoin and Ethereum.
Namely, its Global X 21Shares Bitcoin ETF returned 99.2 per cent over the past year, while the EETH returned 81.9 per cent.
Global X was the only company offering a bitcoin ETF in Australia until this year. Namely, after the SEC’s approval in January incited a rise in bitcoin’s popularity globally, three others have entered the market since. The latest was Digital X with the launch of its bitcoin ETF due on the ASX on 12 July.
Speaking to InvestorDaily this week, the CEO of DigitalX, Lisa Wade, said the firm plans to launch an Ethereum equivalent in the future.
“Bitcoin and Eth in terms of crypto market dominance are almost like a pigeon pair,” Wade said. “They offer that sweet spot in a portfolio which is alpha, risk weighted.”
