Cryptocurrency investors were taken aback by the sudden SEC approval of spot ETH ETFs. Now, another surprising development is unfolding with Ether ETFs. Issuers are updating their S-1 Forms on the last business day of the week, indicating that the listing process is nearing completion.
Recent updates on Spot Ether ETFs
The SEC is anticipated to approve the requisite S-1 Forms for exchange listings next week, with expected listings on exchanges around July 2. These listings will enable investors familiar with traditional markets to trade ETH via ETFs, similar to BTC.
Ethereum is poised to attract considerable interest from long-term investors due to its growth potential, early adoption by major financial institutions in the RWA sector, and its dominant position in the smart contract realm.
However, two crucial narratives emerge here. Firstly, akin to the BTC ETF approval, there may be a “sell the news” scenario post-listing. This likelihood may have been tempered by ETH’s decline to $3,500 following BTC’s price drop. Secondly, a significant risk looms. After initial listing, GBTC saw prolonged net outflows due to rapid investor sales benefiting from negative premiums. Similar trends could affect ETHE, which traded at up to a 50% negative premium 6-12 months ago, even as spot prices rose in tandem with BTC.
Grayscale has yet to include management fees in the ETF filing, raising speculation about the possibility of setting these fees to zero to counteract rapid sales. For ETHE holders focused on long-term objectives, setting an appealing transaction fee is crucial to retaining them amid strong liquidity advantages. High transaction fees also prompted some GBTC sales, leading investors to explore alternatives such as BlackRock.
Today’s updates in the S-1 Forms, lacking transaction fees, indicate that final versions will be available by next Friday’s close of business, setting the stage for the July 2 deadline.
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Disclaimer: The information presented here does not constitute investment advice. Investors should be aware of the high volatility and risk associated with cryptocurrencies and should conduct their own research.