- The SEC has approved the 19b-4 listing for Ethereum ETFs, but the S-1 approval is still pending.
- Bitcoin ETFs have experienced significant inflows, and Ethereum ETFs are expected to attract substantial investments as well.
- Matt Hougan, CIO at Bitwise, highlighted the unusual speed of the SEC’s approval process, suggesting potential political influences.
Discover the latest developments in the crypto market as the SEC approves Ethereum ETFs, raising questions and expectations for future investments.
SEC Approves 19b-4 Listing for Ethereum ETFs
After much anticipation, the U.S. Securities and Exchange Commission (SEC) has approved the 19b-4 listing requests for Ethereum (ETH) ETFs. This approval marks a significant milestone in the crypto market, as it paves the way for more institutional investments in Ethereum. However, it is crucial to note that the SEC has not yet approved the S-1 registration statements, which are essential for the full launch of these ETFs.
What’s Behind the Split Approval?
The split approval has raised several questions within the financial community. Some experts suggest that political influences may have played a role in the SEC’s decision-making process. Matt Hougan, CIO at Bitwise, expressed his surprise at the rapid shift in expectations during a recent episode of the ‘Bankless’ podcast. He stated, “I haven’t seen an example of people having no expectation of approval and flipping to expecting approval so quickly on an effectively overnight basis. So, to the extent that this has never happened again, something was shocking at work here.”
James Seyffart, a Research Analyst at Bloomberg Intelligence, echoed similar sentiments. According to Seyffart, the next steps involve issuers working closely with the division of investment management to finalize the details in the S-1 documents. This process could take several weeks to months, delaying the full launch of Ethereum ETFs.
Impact on Ethereum’s Price
The approval of the 19b-4 listing has had a noticeable impact on Ethereum’s market cap. Initially, the news led to a decline in ETH’s price. However, at the time of writing, Ethereum had rebounded to $3,752, marking a 1.65% increase in the last 24 hours. The broader market sentiment has also turned bullish, led by Bitcoin climbing past $69,000.
Matt Hougan provided further insights into this price movement, stating, “There’s no new supply, net supply is effectively zero and what that means is that this new demand shock has to buy ethereum from people who don’t have to sell it and that’s just an extraordinarily bullish setup.”
BTC Inflows vs. ETH Inflows
Since their debut on January 11, Bitcoin (BTC) ETFs have seen phenomenal inflows. Recent data from Farside Investors revealed that on May 24, Bitcoin ETFs saw total inflows of $251.9 million. The question now is whether Ethereum ETFs will see similar numbers.
According to Matt Hougan, Ethereum ETFs are unlikely to match the inflows seen by Bitcoin ETFs. He explained, “I don’t think Ethereum ETFs will match Bitcoin ETFs but I do think it will be measured in terms of many billions of dollars.” Hougan emphasized that Bitcoin’s simplicity as “digital gold” makes it more easily understandable, whereas Ethereum’s role as a platform for decentralized applications is more complex.
Despite this complexity, institutional investors are likely to see the value in diversifying their portfolios by investing in both BTC and ETH ETFs.
Conclusion
The SEC’s approval of the 19b-4 listing for Ethereum ETFs marks a significant step forward for the crypto market. However, the pending S-1 approval means that the full launch of these ETFs is still weeks or months away. The initial impact on Ethereum’s price has been positive, and while Ethereum ETFs may not match the inflows seen by Bitcoin ETFs, they are expected to attract substantial investments. As the market continues to evolve, institutional investors will likely diversify their portfolios to include both Bitcoin and Ethereum ETFs, contributing to the growth and stability of the crypto market.
