Ethereum
What Still Needs to Happen Before Spot Ether ETFs Can Be Traded
There’s a lot of excitement around the idea that a spot ether exchange-traded fund (ETF) is about to happen. Here’s what’s left to do before such a fund can launch.
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The U.S. Securities and Exchange Commission (SEC) appears set to approve spot ether exchange-traded funds (ETFs), and they could begin trading as early as this week – although there is still some work to be done.
Crypto industry pushed for spot ether (ETH) ETFs have been around for years, almost as long as spot bitcoin has been pushed (BTC) ETFs. The SEC approved Bitcoin products in January after a decade of rejections, but didn’t appear ready to approve Ether equivalents until May. As with Bitcoin spot ETFs, proponents of spot Ether ETFs argue that they will create a safe, regulated investment vehicle that will give the general public exposure to the second-largest cryptocurrency by market cap without requiring them to invest in it directly.
A handful of potential issuers filed amended S-1 forms on Friday and Monday, suggesting that progress is being made. Notably, the filings did not include fee information, so it’s likely there will be at least one more round of comments from SEC staff before trading can begin. Invesco and Galaxy released fees — 0.25% — on Tuesday. VanEck was the only potential issuer to release fees before the latest round of updates.
To be clear, there is no specific timeline for approval. Unlike the 19b-4 filings the SEC approved in May, there is no imminent deadline the agency must meet for a final decision, and so the back-and-forth between regulators and issuers could end as early as Friday or take a few more weeks. A person familiar with the process told CoinDesk that they expect the dialogue to continue for a few weeks.
The filings also do not specify expense ratios. If the amended filings include these key details, it may indicate that this is the final round of amendments.
If the SEC issues its opinion before the end of the day on Tuesday, it’s entirely plausible that issuers will file a final round of amended forms by Wednesday. They should include information about fees and any other details the regulator requires. For spot Bitcoin ETFs, it took the SEC two days to send out final approvals after issuers submitted fees. If that holds up this time around, provided issuers submit their fees by Wednesday, it’s possible an approval could be given by Friday.
The products could then begin to be marketed relatively quickly.
Hours before the Bitcoin spot ETFs were approved by the SEC in January, one of the listed exchanges, Cboe, added the funds to its “New Listings” page, saying this was “standard procedure” before a new ETF is approved. If that’s the case, given that five of the potential Ether ETFs will be listed on Cboe, we could well see a similar situation play out the day these ETFs receive approval.
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