The SEC has initiated discussions regarding S-1 registration statements with potential Ethereum ETF issuers, according to an insider source. While amended 19b-4 forms have been submitted, there has been limited progress on the S-1 forms up to this point.
A source from within one of the issuing firms mentioned, “Basically, it’s just starting. It feels a little like [the Division of Investment Management] was more-or-less caught off-guard by the change of tune. So, just starting.” This high-ranking member emphasized that although they do not foresee the advancement towards an Ethereum ETF being halted, they remain cautious about the process.
For Ethereum ETFs to gain approval, the SEC must first approve the 19b-4 forms, as was done in a collective order for the Bitcoin ETFs, followed by the effectiveness of the S-1 registration statements. Only then can trading commence.
Typically, before each approval, the forms are returned for amendments and subsequently refiled. Upon submission of the final versions, the SEC may then approve them. Despite significant progress on the 19b-4 forms, only Fidelity has recently filed an amended S-1 form. With discussions on the S-1 forms now underway, additional amendments are likely.
Today marks a critical decision point for the SEC regarding Ethereum ETFs. The SEC faces a deadline to either approve or deny VanEck’s Ethereum ETF 19b-4 form. Given the expectation to approve multiple issuers simultaneously, as was the case with Bitcoin ETFs, there is optimism among analysts that, if approved, it will occur today.
Bloomberg ETF analyst Eric Balchunas noted on X that he anticipates the SEC’s decision around 4 p.m. ET, referencing past decisions that were announced around this time. “For spot BTC, they dropped it at 3:45 p.m., some others in past were slightly after 4 p.m. Anything [is possible though],” he stated.
However, even if the 19b-4 forms are approved, there might still be a delay before the S-1 forms are ready and take effect, potentially postponing the start of trading. Balchunas indicated in a recent interview with The Block that, “I don’t know how fast the fast track is, but it’s going to be probably a mad scramble for the next couple days, maybe even weeks — depends on the S-1.”
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Bloomberg ETF analyst Eric Balchunas said on X that he anticipates the SEC will make a decision around 4 p.m. ET. “For spot BTC, they dropped it at 3:45 p.m., some others in past were slightly after 4 p.m. Anything [is possible though],” he said.
Even with 19b-4 forms potentially being approved, the S-1 forms might still require more time before they are finalized and go into effect, potentially delaying the start of trading. Balchunas mentioned in a recent interview with The Block, “I don’t know how fast the fast track is, but it’s going to be probably a mad scramble for the next couple days, maybe even weeks — depends on the S-1.”
10x Research: Ethereum ETF Approval Likely Today Amidst Strong Market Reception
According to crypto research firm 10x Research, the SEC is expected to approve a US-listed Ethereum ETF today. Reflecting on the SEC’s prior warning signals ahead of crypto futures-linked ETF listings, 10x Research anticipates that a similar warning could be issued around 9 a.m. ET, offering more clarity on the imminent Ethereum ETF approval.
Grayscale’s $11bn Ethereum Trust Nearing Par with NAV
In anticipation of this approval, the Grayscale Ethereum Trust has seen its discount narrow significantly, from -30% to just -8% within a week. This shift suggests a strong market belief in the likelihood of an ETF approval. Despite this optimism, some market turbulence is expected as investors move to lock in their gains. Additionally, discussions have intensified regarding the exact timing of when these approved ETFs will commence trading.
Potential Market Impact
10x Research predicts that Ether prices could rise further if the Federal Reserve adopts a dovish stance. With a positive outlook from both major US political parties, the firm expects Ethereum prices to continue escalating in the long run, especially if the focus transitions from transactional value to storage value.
ETF Approval: A Milestone in a Broader Vision
However, 10x Research emphasizes that ETF approval is just the initial step in their broader vision, which includes the tokenization of all assets as the ultimate milestone. As the crypto industry continues to evolve, ETFs, including those for Bitcoin and Ethereum, are expected to hold substantial crypto exposure, further legitimizing and integrating cryptocurrencies into traditional financial markets.
ETHUSDT ETH 3873.61 +3.78%
As the potential approval looms, market participants are keenly watching for any signals from the SEC, with expectations high for a significant market impact. The narrowing discount on the Grayscale Ethereum Trust is a strong indicator of investor confidence in the forthcoming decision, and the subsequent market movements will be closely monitored.
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