The anticipated launch of spot Ethereum exchange-traded funds (ETFs) has been postponed, dampening hopes within the crypto industry that these financial products would debut as early as this week.
Industry experts now express uncertainty regarding the Securities and Exchange Commission’s (SEC) approval of the ETF applications within the initial timeline. Eric Balchunas, a Bloomberg Intelligence analyst, noted on X (formerly Twitter), “We’re gonna have to push back our over/under till after the holiday.” Initially, Balchunas had predicted that the SEC would approve the applications before July 4. However, after learning that the regulator requested prospective issuers to amend their applications, he adjusted his forecast to the week of July 8.
The delay represents a minor setback for the crypto sector, which had hoped that the launch of spot Ethereum ETFs would invigorate the currently stagnant market, akin to the impact seen with spot Bitcoin ETFs earlier this year. Bitwise’s Matt Hougan projects that Ethereum exchange-traded products will attract $15 billion in net flows within their first 18 months on the market.
On the crypto betting site Polymarket, the probability of a spot Ethereum ETF starting to trade by July 4 has plummeted to 4%, down from 77% last week. An insider source told The Block on June 29 that the SEC had asked issuers to address comments in their applications and resubmit by July 8. The source also anticipated more rounds of back and forth between applicants and the SEC.
Despite this regulatory delay, Ethereum has shown resilience, surging 3% over the weekend and trading at $3,450.
While the postponement of the Ethereum ETF launch has tempered immediate expectations, the industry remains optimistic about the long-term benefits these products will bring once approved. Market participants are closely watching the ongoing interactions between the SEC and ETF issuers, with hopes that regulatory clarity will soon pave the way for these innovative financial products.
