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Ethereum ETF Approval Imminent: SEC Set to Decide by Mid-July

Spot Ethereum ETF

  • Spot Ethereum (ETH) ETF applications are expected to be approved on July 15 as revised S-1 forms are scheduled to be submitted on July 8, with final submission expected to be on July 12. 
  • Crypto Exchange Gemini believes that in the first six months of trading, Ether ETFs could record net inflows of $5 billion. 

The S-1 filings for spot Ethereum (ETH) ETFs may be approved, as the president of The ETF Store, Nate Geraci, anticipates a decision in mid-July. 

Nate Geraci, president of The ETF Store, predicted the launch schedule of the Ethereum spot ETF. He said that Bloomberg’s forecast is still mid-July, the revised S-1 is expected to be submitted on July 8, and the final S-1 may be submitted on July 12, which theoretically means a…— Wu Blockchain (@WuBlockchain) July 3, 2024

Interestingly, this is in line with an earlier prediction by the product manager at Consensys, Jimmy Ragosa, alluding to potential approval in just a few days following Bitwise Asset Management’s submission of an amended S-1 document.

As reported by Crypto News Flash earlier, Ragosa noted that details relating to the fee structure and initial investment were removed from the updated document. Before that, the US Securities and Exchange Commission (SEC) had emphasized the need to prioritize “risk factors, legal and regulatory statements, contact information, and the distribution plan,” and also extended the deadline for submission of updated documents to July 8.

Outside the bracket of amended documents, the SEC has also extensively interacted with the Ethereum ETF applicants to address all the major issues, with the latest round of feedback involving only minor queries. 

Expectations of Ethereum (ETH) ETF After Approval

With the approval imminent, crypto exchange Gemini has predicted that the spot Ether ETFs could see a net inflow of $5 billion in the first six months. According to their research report, the ETH ETFs in the US could have a total Asset Under Management (AUM) of $13 billion-$15 billion within the period. However, this would be under the condition that the current Grayscale Ethereum Trust (ETHE) is combined with the flows. 

Given the AUM comparable in international ETF markets, robust on-chain dynamics, and differentiating factors such as a thriving stablecoin environment, there is favourable risk-reward of an ETH catch-up trade in the months to come.

As stated in the report, Gemini believes that a net inflow into the spot Ether ETFs below $3 billion would be disappointing because its Bitcoin counterpart recorded $15 billion in the first six months. Mathematically, the expected $5 billion net inflow would be a third of Bitcoin’s numbers. Also, an inflow of around 50% or $7.5 billion would be a “significant upside surprise.” 

As reviewed by CNF, the report notes that a possible return of the Ether/Bitcoin ratio to the median value of the past three years could see a 20% surge to 0.067. Fascinatingly, a return to 0.087 could represent a surge of 55%. 

Steno Research Expects a $15-$20 Billion Net Inflows

Agreeing with this exciting analysis, Steno Research has also predicted that $15-20 billion in net inflows could enter the Ether spot ETFs in the first 12 months. 

We continue to forecast a net inflow between $15 billion and $20 billion in the first 12 months, even considering the outflow from the Grayscale Ethereum Trust (ETHE).

According to the report, the Ether/Bitcoin ratio could strengthen to 0.065 later this year if the estimated spot Ether ETF inflows appear valid. With this influence, Steno believes that ETH could rise to $6,500 later this year. 

At press time, ETH was trading at $3,350 after declining by 2.5% in the last 24 hours and 1.4% in the last seven days. 

 

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