The road to a spot Ethereum (ETH) exchange-traded fund (ETF) in the US just got a bit bumpier. The Securities and Exchange Commission (SEC) surprised the market by greenlighting 19b-4 applications for several issuers, including VanEck, BlackRock, and Grayscale, on May 23rd. However, the initial S-1 filings – which detail the structure and risks of the funds – didn’t meet the SEC’s requirements.
This unexpected hurdle has caused a last-minute scramble for asset managers. All firms have been instructed to submit amended S-1 filings by Friday, May 31st. After reviewing the revisions, the SEC will likely issue comments, potentially triggering further adjustments before final approval.
While the application process continues, a recent report from JPMorgan throws some cold water on launch-day excitement. Analyst Nikolaos Panigirtzoglou predicts a “negative initial market reaction” for spot ETH ETFs. His 25-page report, titled “Flows & Liquidity,” suggests these products will attract significantly less investment compared to their Bitcoin (BTC) counterparts.
JPMorgan attributes Bitcoin’s success to two key factors: first-mover advantage and the recent halving event (a pre-programmed reduction in new coin supply). These factors fueled significant demand for spot Bitcoin ETFs, with BlackRock and Fidelity amassing a staggering $10 billion in Assets Under Management (AUM) within weeks of launch.
The report also highlights the absence of staking in current spot ETH ETF proposals. Staking, which allows investors to earn rewards for holding Ethereum, could have made these products more attractive. Its exclusion might dampen investor enthusiasm.
Also Read:Ethereum Open Interest Spikes as Price Eyes $4,000: Is a Repeat of the 2017 Retail Boom Coming?
Despite the potential dampener, the process marches on. Investors should keep an eye out for revised S-1 filings and the SEC’s response. While JPMorgan predicts a muted launch, the long-term prospects for spot ETH ETFs remain to be seen.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
About The Author
