In May, the SEC led by President Gary Gensler approved the request to issue spot Ethereum ETFs on US exchanges.
However, the complete approval process of these new ETFs is not yet concluded, because in May only the request was approved.
It is indeed necessary for the issuers to now present the additional documentation so that the SEC can give the final green light.
Summary
SEC and Gary Gensler: The timing for the arrival of Ethereum ETFs
For Bitcoin it was different, because after the August 2023 ruling in which a court effectively ordered the SEC to approve them, there were months to prepare all the complete documentation. When the SEC gave its approval on January 10, 2024, it approved the entire complete documentation, and the ETFs were able to land on the stock exchange the very next day.
For ETFs on Ethereum things went differently.
The expected deadline was May 23, but everyone was expecting the SEC to opt for an initial rejection, as was the case for Bitcoin.
For this reason, only the documentation of the request had been submitted, that is, only the first step of the approval process.
In a completely unexpected manner, the SEC a couple of days earlier started asking applicants for additional information and modifications, precisely because at the last moment it had decided to approve them.
And so on May 23, he was able to approve only the request, and not the complete documentation.
At that point, the hypothesis was that by the beginning of July all applicants would have been able to submit the complete documentation, so that the SEC could approve it definitively. In that case, by July 5, they could have actually landed on the stock exchange.
The cold shower
The president of the SEC, Gary Gensler, does not seem to agree with this timing.
In fact, yesterday during a Senate hearing, he said that the final approval could come during the summer.
Although summer begins on June 21 – and therefore Gensler’s words in theory would not completely disprove the early July hypothesis – it ends on September 21, so it seems that the SEC chairman is taking additional time to reach a decision.
However, the markets do not seem to have interpreted Gensler’s words as a postponement, given that yesterday the price of ETH did drop from $3,500 to $3,430, but only to then return to $3,500. So if at first his words seemed like a cold shower, later a less pessimistic interpretation seems to have prevailed.
Gensler della SEC against Ethereum and ETFs
Gensler is still convinced that ETH should be considered an unregistered security. Also yesterday during the same hearing, he effectively refused to give a clear and certain answer on the matter, despite being asked an explicit question.
However, Gensler alone does not have the power to make decisions on behalf of the entire board of the agency, so much so that in May the president would probably have preferred to reject the requests for spot Ethereum ETFs, but the SEC approved them.
We must not forget that in November in the USA there are the presidential elections, and therefore the US politics is in the electoral campaign.
Gensler belongs to the democratic area of the current Biden administration, within which there are several skeptics regarding criptovalute. However, President Biden himself does not seem to want to campaign against the crypto sector, also because he fears losing votes if he does so.
It is therefore also possible that the words spoken yesterday by Gensler, and not at all definitive, fall within the scope of pro-Biden electoral propaganda. In fact, the right time to reject the requests for the issuance of spot ETH ETFs was May, while now it no longer seems possible to reject them, but only to postpone them.
The very fact that the president of the SEC has stated that the final approval will come in the summer makes it clear that it should still arrive before the elections, and at that point, postponing it would only serve to alienate the votes of the supporters of the crypto sector, perhaps without any other electoral advantage.
The landing on the stock exchange
It therefore remains possible that the new ETF on ETH spot could land on the US stock exchanges in the first week of July, even if this timing is by no means certain.
In any case, it is assumed that after the stock market launch, the price of ETH could drop initially, as happened to BTC in January.
First of all, the classic sell-the-news could trigger. Additionally, it is possible that the Grayscale Ethereum Trust might start liquidating ETH as soon as it hits the stock market in the form of an ETF, exactly as happened with its Bitcoin ETF.
On the other hand, as soon as there are greater certainties regarding the stock market debut, the price of ETH could rise, so a possible rise is expected in the second half of June, followed by a possible decline in July, and a subsequent recovery in August.
