Cryptocurrency investors were left in disbelief when the SEC unexpectedly granted approval for spot ETH ETFs. And now, brace yourselves for another shock in the realm of Ether ETFs. Issuers are currently updating their S-1 Forms on the last business day of the week, signaling that the listing process is nearing completion.
The latest developments in Spot Ether ETFs indicate that the SEC is expected to approve the necessary S-1 Forms for exchange listings next week. Typically, these listings take place around July 2. Once these listings are in effect, investors who are familiar with traditional markets will have the opportunity to trade ETH through ETFs, much like they do with BTC.
Given Ethereum’s growth potential, early adoption by major financial institutions in the RWA sector, and its dominant position in the world of smart contracts, it is expected to attract significant interest from long-term investors.
However, there are two crucial aspects to consider. Firstly, similar to the BTC ETF approval, we might witness a “sell the news” scenario following the listing. This possibility may have been weakened due to ETH’s price drop to $3,500 triggered by BTC’s decline. Nonetheless, the second issue poses a significant risk. After the initial listing, GBTC experienced prolonged net outflows as investors quickly sold their holdings to capitalize on the negative premium. The same situation could arise with ETHE, which was purchased at a negative premium of up to 50% six to twelve months ago, as the spot price rises alongside BTC’s price increase.
Grayscale has yet to include the management fee in the ETF filing, raising concerns about the possibility of setting the management fee to zero to offset rapid sales. For ETHE holders who have long-term goals, it is crucial to establish an attractive transaction fee to prevent them from switching to lower-cost alternatives while benefiting from the strong liquidity advantage. Some GBTC sales were driven by the high transaction fee, leading to a shift towards alternatives like BlackRock.
Today’s updates to the S-1 Forms, which do not mention transaction fees, suggest that the final versions of the forms will be available by the end of the business day next Friday. Therefore, the final deadline for July 2 is next Friday.
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Disclaimer: The information provided in this article should not be considered investment advice. Investors should be aware that cryptocurrencies are highly volatile and carry inherent risks. It is recommended to conduct thorough research before making any investment decisions.
