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ETH price falls as Ethereum ETF approval is delayed

ETH price falls as Ethereum ETF approval is delayed
ETH price falls as Ethereum ETF approval is delayed

Ethereum (ETH) price has suffered a setback after briefly breaking above the $3,500 mark on Monday and then falling again to the $3,400 support level on Tuesday. The delay comes due to the expected full approval of the Ethereum ETF applications by the SEC, which have now been pushed back to July 8.

SEC demands revised documents

Analysts had originally expected approval by July 2, but the SEC has asked issuers to submit revised documents by July 8. Bloomberg ETF expert Erich Balchunas said on social media that the SEC took more time to respond, resulting in a revised timeline. Balchunas specified:

Unfortunately, we have to delay our over/under rules until after the holidays. Seems like the SEC took more time this week to get back to people (even if again, it’s very slight changes) and from what I hear, next week is dead because the holidays = July 8th. The process will continue and soon after that they will launch.

SEC Chairman Gary Gensler had previously indicated that Ethereum ETFs would likely be approved by “the end of the summer.” The SEC is currently reviewing and approving the S-1 Formswhich represent the second step towards the introduction of spot Ethereum ETFs.

Despite the delay, asset managers remain optimistic that the SEC will greenlight the first U.S. spot Ethereum ETF applications that invest directly in etherExpectations are mid-July. A recent Bloomberg report highlighted the constructive dialogue between asset managers and the regulator.

Launch of the Ethereum ETF is getting closer

According to the reportthe regulator’s feedback raised minor issues that issuers are currently addressing. In May, the SEC approved the exchanges’ proposal to list these products, although their launch required a separate approval.

Steve Kurz, head of asset management at Galaxy Digital, predicted the approval of an Ethereum ETF within the next few weeks. Galaxy Digital has filed an application for an Ether ETF, and Kurz expressed confidence in the process, stressing that they are familiar with the requirements based on their experience with the Bitcoin ETF.

Several well-known companies, including BlackRock Inc., Fidelity Investments, 21Shares and Invesco, are currently awaiting approval. Disclosure of fees for the respective funds is a necessary step before trading can begin.

Assuming the funds get the green light, a key question remains: Will Ether portfolios generate demand similar to the historic debut of U.S. spot Bitcoin ETFs in January, which amassed $52 billion in assets?

Inflows of 15 billion US dollars within the first 18 months

As before reported According to NewsBTC, Ethereum ETFs could see significant inflows in the first few months of trading, although they may not see the same inflow volume as the newly approved Bitcoin ETF market.

In a note to investors, Bitwise Chief Investment Officer (CIO) Matt Hougan predicted that these ETFs could see net inflows of $15 billion in the first 18 months of trading.

To arrive at this estimate, Hougan considered the market capitalizations of Bitcoin and Ethereum and expected investors to estimate their respective exchange-traded products (ETPs) proportionally.

Hougan noted that U.S. investors have already invested $56 billion in spot Bitcoin ETPs, and he expects that number to reach $100 billion or more by the end of 2025.

On this basis, he concluded that spot Ethereum ETFs would need to attract $35 billion worth of assets to compete with Bitcoin ETFs, a process that could take about 18 months.

In addition, he pointed out that the Spot Ethereum ETFs would be launched thanks to the conversion of the Grayscale Ethereum Trust (ETHE) into an ETF with assets of $10 billion.

Ethereum ETF
The daily chart shows a downward trend in ETH price. Source: ETHUSD on TradingView.com

At the time of writing, ETH is trading at $3,418, recording significant losses of over 9% on the month.

Featured image of DALL-E, chart from TradingView.com

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