Ethereum enthusiasts cruised the information highway toward a different kind of fireworks on the Fourth of July: the launch of the first spot Ethereum ETF.
Related reading
Investor excitement was dampened when the U.S. Securities and Exchange Commission unexpectedly returned applicants’ proposals, delaying the long-awaited debut.
Missed exit: Ethereum ETF launch in July goes up in smoke
The news came as a shock to many, as both market watchers and analysts had confidently predicted Launching in Julywith some even suggesting a celebratory swap on Independence Day.
Bloomberg ETF analysts Eric Balchunas and James Seyffart were among those who waved the checkered flag a little too early. Their prediction of a July 2 debut was lost after the SEC decided to slow down the process.
Unfortunately, I think we’ll have to postpone our over/under until after the holidays. Seems like SEC took extra time to get back to ppl this week (although again very slight adjustments) and from what I hear next week is dead bc vacation = July 8th the process will resume and they will launch shortly after … https://t.co/0ZQR7yiBLt
— Eric Balchunas (@EricBalchunas) June 28, 2024
Insiders claim the SEC delayed the expected debut date by requesting changes to the S-1 filings that issuers filed.
Think of the S-1 form as a company’s passport to going public. This first step in the rigorous registration process with the SEC provides all the necessary details for the regulator to investigate the entity before it offers shares to the public for the first time.
Now this unexpected diversion raises serious concerns about the scheme as a whole. While there are others who expect the green light on July 8, the impending US holiday likely adds another layer of wrinkles.
Uncharted territory: the SEC takes over
For both issuers and investors, the lack of a clear timetable is a major source of discomfort. Unlike previous 19b-4 forms, which required the SEC to make a decision within a certain time, the S-1 filing process gives the regulatory agency as much time as necessary. This essentially gives the SEC complete control, allowing them to submit change requests and conduct a comprehensive review without feeling under time pressure.
While SEC boss Gary Gensler has previously hinted at approvals “sometime this summer”, his comments have not provided much solace to the nervous market. The recent hiccup with the S-1 forms indicates that even a summer launch could be overly optimistic.
Related reading
The road ahead
The SEC’s recent actions have thrown the timeline into disarray, leaving investors and issuers in a state of uncertainty. While approval could happen sometime this summer, the lack of clarity paints a picture of a bumpy ride for these highly anticipated investment vehicles.
Featured image from Pexels, chart from TradingView
