Ethereum ExchangeTraded Fund ETF Launch Date and Potential Price Impact
Bloomberg analyst Eric Balchunas is standing by his prediction that U.S. spot Ethereum ETFs will launch on July 2, following a surge in amended S-1 filings. Major asset managers like BlackRock, VanEck, and Fidelity have submitted amended S-1 filings, with some revealing competitive fee structures. Analysts have varying opinions on the potential demand for Ethereum ETFs, with estimates ranging from $1-3 billion to $4 billion in net inflows. Some experts, such as Nate Geraci of ETF Store, suggest that Ethereum ETF approval could come as soon as next week. The SEC has approved 19b-4 filings for eight spot Ethereum ETFs, but their S-1 filings still need to be greenlit before trading can commence.
As the launch of spot Ethereum ETFs in the United States approaches, industry experts and analysts are closely monitoring developments. Bloomberg’s senior ETF analyst, Eric Balchunas, has reiterated his prediction of a July 2 launch date for U.S. spot Ethereum ETFs. This comes after a noticeable increase in amended S-1 filings observed on Friday. The U.S. Securities and Exchange Commission (SEC) has already approved 19b-4 filings for eight spot Ethereum ETFs last month. However, the regulatory body still needs to approve their S-1 filings before these ETFs can begin trading. SEC Chairman Gary Gensler has indicated that spot Ethereum ETFs will launch this summer, pending the approval of their S-1 filings.
Major asset managers have been quick to respond to this opportunity. BlackRock, the world’s largest asset manager, has entered the market with a $10 million seed investment. VanEck has filed with a competitive fee of 0.20%, closely matching Franklin’s 0.19%. Other significant players like Fidelity, Bitwise, 21shares, and Grayscale have also filed, although they have not yet disclosed their fees. The competitive fee structures suggest that issuers are positioning themselves aggressively in anticipation of strong market interest.
Analysts are divided on the potential demand for Ethereum ETFs. JPMorgan analysts project that these ETFs could attract about $1 billion to $3 billion in net inflows in the second half of 2024. Bloomberg’s Balchunas estimates that Ethereum ETF products could capture only 20% of the Bitcoin ETF market share, basing his projection on the current demand for ETH vs BTC in the futures market. On the more optimistic side, K33 Research’s Vetle Lunde estimates that demand for ETH ETF products could reach $4 billion in net inflows in the first five months alone. Bitwise CIO Matt Hougan views the second half of 2024 as full of ‘tailwinds’ for ETH demand.
A recent Deribit Insights report also painted a bullish future based on recent options data, noting significant purchases of ETH September $4,000 call options. The potential impact on Ethereum’s price is also a topic of speculation. QCP Capital analysts suggest that ETH could surge above $4,000 and potentially retest its record high of $4,800 if the ETFs capture 10-20% of Bitcoin ETF flows. However, some market participants, like Quinn Thompson, founder of crypto hedge fund Lekker Capital, believe the market might be underestimating the positive impact of the upcoming ETH ETF.
Nate Geraci, president of ETF Store, has suggested that approval could come as early as next week. This aligns with Balchunas’ July 2 prediction, which is strategically timed to coincide with the U.S. Independence Day holiday. Former SEC official Jay Clayton has also reinforced expectations for imminent approvals. It’s worth noting that while most major players are pushing forward with their ETF plans, Hashdex, a notable player in the ETF arena, has withdrawn its application for a spot Ethereum ETF without disclosing reasons or future plans. Instead, they have presented a mixed Ethereum and Bitcoin solution.
The coming weeks promise to be crucial for the Ethereum market and the broader cryptocurrency ecosystem. Whether the ETFs launch on July 2 or later in the summer, their impact on market dynamics, institutional involvement, and Ethereum’s price will be closely watched by investors.
