Three industry insiders reported that at least three of the eight asset managers seeking to create ether-linked exchange-traded funds to begin trading next Tuesday had received preliminary approval from the SEC
The sources stated that the approval is contingent upon submitting the final offering documents to regulators by the end of this week. According to one source, the launch of all eight is anticipated to co-occur.
According to a spokesperson, the Securities and Exchange Commission (SEC) does not provide commentary on individual filings.
Following the launch of nine U.S. spot bitcoin ETFs in January, the ether products would signal another significant victory for the cryptocurrency industry’s campaign to mainstream digital assets. Ether is the second-largest cryptocurrency in the world, following Bitcoin.
According to industry sources who spoke on background due to the confidentiality of the discussion with the SEC, BlackRock, VanEck, and Franklin Templeton are among the eight asset managers whose applications are expected to be approved by the SEC next Monday afternoon, July 22.
Trading in the products is anticipated to commence the following day. Ether traded at $3,433.07 in the late afternoon of Monday, representing a 7.1% increase on the day and a 14.4% increase in the cryptocurrency’s value over the past week.
Spot ETFs that monitor the price of bitcoin were launched in January, marking the end of a decade-long dispute with the Securities and Exchange Commission (SEC), and the SEC had previously rejected the products due to market manipulation concerns.
After losing a court challenge launched by digital asset manager Grayscale Investments, the agency was compelled to approve the ETFs, warning that the products were hazardous.
The launch was one of the most successful in the history of the ETF market, as the nine new products attracted approximately $6.6 billion in assets during their initial three weeks of trading, according to Morningstar Direct Data. The ETFs had received a net of $33.1 billion in inflows as of the conclusion of June.
Martin Leinweber, digital asset product strategist at MarketVector Indexes, anticipates that the new ether ETFs will experience significantly lower inflows and increased volatility in price. This is because Ether has a smaller market size and trading volumes than Bitcoin, which experienced a new high following the approval of the ETFs.
According to CoinGecko, the market value of Bitcoin is just over $1 trillion, while Ether’s is $359 billion.
“It is crucial to moderate expectations,” Leinweber stated.
Galaxy Research, whose sister company Galaxy Asset Management has an ether ETF with Invesco, has projected that the ether products could draw monthly inflows of $1 billion despite varying estimates on demand.
Thomas Perfumo, the head of strategy at Kraken, a crypto exchange, stated that inflows to Ether can reach a different level than those to Bitcoin ETFs to be deemed successful due to the smaller market size of Ether.
In September, issuers commenced the process of registering for ether ETFs. After meetings with officials that were discouraging, executives initially harbored low expectations that the SEC would approve the products.
However, the agency caught the industry off guard in May when it approved rule modifications necessary for exchanges to list the products. This was the first of two significant regulatory hurdles.
Last month, SEC Chair Gary Gensler disclosed to Reuters that the Grayscale ruling had influenced his decision to approve the ether products, as the fundamental market circumstances were comparable.