Among the news from yesterday, the SEC added ProShares’ request to those that should be definitively approved for the issuance of spot Ethereum ETFs.
In May, it had approved eight more, but evidently, the one from ProShares had not yet arrived.
The fact is that, despite having already approved the requests, the process to reach the final approval of all the documentation is not yet complete, and it is assumed that it will not be before July, or at most the end of June, so in fact there is still time to submit new applications.
Summary
SEC news: The approval of ProShares’ Ethereum ETF
The document published yesterday by the SEC reveals that NYSE Arca has proposed a rule change to list and trade shares of the ProShares Ethereum ETF.
The fund will be simply called ProShares Ethereum ETF, and for now it does not yet have a ticker.
Now the SEC will allow time to submit public comments on this request until the end of the month, and then it will have 45 days to approve, disapprove, or extend the request.
It is however very likely that the final decision will come along with all the others, just as it happened both in May and January, when in a single day the SEC approved all the requests for the issuance of a spot Bitcoin ETF on the US exchanges.
So now there are nine requests that should be approved in July, and since for this ProShares request there is time until the end of June to submit comments, it seems likely that the block approval cannot happen before July.
The approval process
Specifically, what the SEC approved en bloc in May are the requests to be able to issue an Ethereum spot ETF on the US exchanges submitted by eight companies with the 19b-4 form.
This is actually just the first step, because to reach the final approval it is necessary for the SEC to also approve the S-1 form.
Currently, not all eight applicant companies have already submitted this final S-1 form, although at least one (BlackRock) has already done so.
Certainly, it has not yet been presented by the ninth applicant, namely ProShares.
The approval of the S-1 form constitutes the definitive green light, after which the shares of the ETFs can effectively land on the stock exchange.
In January, when the S-1 forms of the spot Bitcoin ETFs were approved, the actual landing on the stock exchange took place the day after, because everything was already ready.
The same thing could happen for those on Ethereum, given that for several weeks now the issuing companies have been preparing for the actual launch.
Moreover, although the SEC will most likely approve the S-1 forms all together, it is not certain that the ETFs will be listed on the same day, so there is a bit of competition among the different issuers to be among the first to have the opportunity to launch the actual trades on the stock exchange.
The successo
The spot Bitcoin ETFs launched in January on the US exchanges have had great success from the very beginning.
It should be noted, however, that in the first weeks the Grayscale ETF took advantage of this to liquidate many BTC, given that previously it was a fund traded only OTC that could not easily liquidate the underlying and that over the years had accumulated as many as 620,000 BTC.
It is hypothesized that something similar could happen this time as well, given that one of the ETFs is precisely the Grayscale Ethereum Trust which holds more than 10.7 billion dollars of ETH.
The Grayscale Bitcoin Trust has gone from 28.5 billion dollars to 19.2, and since it is hypothesized that Ethereum ETFs could attract capital equal to about a quarter or a fifth compared to those of Bitcoin, the risk that the current 10.7 billion is too much exists.
Therefore, after the actual stock market debut, it will be necessary to distinguish between daily trading volumes, which could be significant, overall capital inflows or outflows on all new ETFs, and Grayscale liquidations.
In light of this, although in the case of high trading volumes this launch can immediately be defined as a success, it will be necessary to wait for the situation to stabilize before being able to issue a definitive judgment.
As for Bitcoin, it was evident from the beginning that the new ETFs were a success, but it took a few weeks before this success could start to have positive effects on the price of BTC.
It is not a coincidence that the price of ETH is not growing in these days of anticipation, probably also because in reality a drop in its price is expected after the actual landing on the stock exchange of its new ETFs.
