U.S. SEC Chair Gensler Says Ethereum ETF Approval is Going Smoothly

• U.S. SEC Chair Gary Gensler states the approval process for the Ether ETF is progressing smoothly, with a launch envisioned this summer.
• Bernstein analysts predict that Ether ETFs, once approved, might mirror the demand of Bitcoin ETFs but to a lesser extent.

U.S. Securities & Exchange Commission (SEC) Chair Gary Gensler, during the recent Bloomberg Invest Summit, commented that the approval process for the spot Ethereum (Ether) ETF is progressing smoothly. 

However, he mentioned that while he isn’t sure of the timeline for the product's launch, he envisions it occurring sometime this summer. Gensler also stated that the only steps remaining are "disclosure and registration." 

These remarks are consistent with his earlier statements made on crypto-related matters before the U.S. Senate Appropriates Subcommittee on Financial Services, where he discussed the ongoing approval process for the Ether ETF.

Last month, the SEC approved applications for eight Ether ETFs. However, these firms must still activate their registration statements, known as S-1s, or S-3 in Grayscale’s case—which is attempting to convert its Ethereum Trust to an ETF—before trading can commence. 

Last week, these firms updated their filings, adding specifics about seed investments and fees as they await the SEC’s final approval to start trading. 

Gensler also noted that such processes are routine for the SEC's Division of Corporation Finance, stressing the smooth operation and the responsibility of asset managers to provide accurate disclosures.

Bloomberg ETF analyst Eric Balchunas recently predicted July 2 as the likely launch date for the ETFs. In a June 21 post on X (formerly Twitter), Balchunas stated that there are going to be various filings coming in and the next steps involve the SEC reviewing these amendments and giving final approvals.

Additionally, in a June 25 post on X, Balchunas also noted that VanEck had filed an 8-A form for a spot Ether ETF. He pointed out that VanEck's previous 8-A filing for their Bitcoin ETF was exactly seven days before its launch, suggesting this could be a positive sign for the projected July 2 launch date of the Ether ETF. 

Amid all the talks about the spot Ether ETF, Bernstein analysts share a noteworthy take. 

According to Gautam Chhugani and Mahika Sapra of Bernstein, spot Ether ETFs might attract similar types of demand as Bitcoin ETFs once approved, but on a smaller scale. These Ether ETFs are unlikely to see as much conversion due to the absence of an ETH staking feature. 

However, they anticipate that the basis trade, which involves simultaneously buying the spot ETF and selling the futures contract to profit from price convergence, will gradually attract interest and contribute to robust liquidity in the ETF market.

Edited by Harshajit Sarmah