Key Points
•Earlier today, 8 Ethereum ETFs were approved.
•However, it may take weeks or even months for the S-1 registration statement to be approved and the product to be traded.
The ETFs received full approval earlier today. However, it may be some time before they are ready for use.
The SEC approved Form 19b-4 for Ethereum ETFs, including products from BlackRock, Fidelity, and Grayscale. However, for these products to begin trading, their S-1 registration statements need to become effective.
When the Bitcoin ETF was approved, the Form S-1 was prepared before the 19b-4 was approved. This resulted in the Form S-1 becoming effective very quickly and trading starting the next day.
What is different about the Ethereum ETF is that the SEC did not begin engaging with the issuer until earlier this week. Pundits speculate that this could be a political decision behind the last-minute change of heart. Now, while the issuer was able to quickly file a Form 19b-4 before today’s deadline for the VanEck ETF, there has been less communication regarding the Form S-1.
There is still a lot of work to be done on the S-1 form, according to people familiar with the matter. It could take weeks to iron out some of the issues, they said, but that ultimately depends on how quickly the SEC responds. As a result, the exchanges and issuers haven’t even started discussing bringing the products online, they said.
This is in line with estimates from industry experts. “I don’t know how fast the fast track is, but it could be a mad scramble over the next few days, or even weeks — depending on the S-1,” Bloomberg ETF analyst Eric Balchunas told The Block in a recent interview before the 19b-4 was approved.
Galaxy Digital predicts that the spot Ethereum ETF will be listed on exchanges in July or August. Galaxy Digital said in the report that the risk profile of the spot Ethereum ETF is "significantly" higher than the spot Bitcoin ETF, which may prolong the time it takes for regulators to make decisions on these funds.
With today’s order, the SEC may begin providing issuers with feedback on their S-1 forms and working with them to get them ready. Only then, and once the exchanges are ready, can trading begin.
So while Ethereum ETFs have been approved, they likely won’t begin trading for a few weeks — maybe longer or shorter, depending on the agency’s urgency.
