Ethereum ETF Applications ‘Going Smoothly’ Says Gensler

• Ethereum ETF approvals are touted for early July, but there is no official confirmation of this.
• The SEC recently flipped its stance on Ethereum. 
• Ethereum ETFs are expected to replicate Bitcoin ETFs’ success.

U.S. spot Bitcoin ETFs have been a tremendous success , consistently attracting substantial daily inflows and growing in valuation since their launch. Starting from an initial valuation of $28.7 billion, these ETFs have surged to $53.6 billion, highlighting the strength of investor demand. This success has greatly enhanced Bitcoin’s legitimacy in the financial world while providing a strong tailwind to Bitcoin’s price. 

Following the SEC’s approval of Bitcoin ETFs in January after years of rejections, the crypto investment landscape has significantly changed. Attention now turns to Ethereum ETFs as the next potential approval. However, the SEC remains guarded on when they will approve ETH ETF products.

Gensler Cagey on Ethereum ETF Applications 

In the wake of Bitcoin ETF success, a slew of prominent asset managers, including VanEck, Bitwise, BlackRock, and Valkyrie, have submitted applications for Ethereum ETFs. The crypto community expects imminent approval, with July 2 touted as a potential target date.

Speaking at the Bloomberg conference on June 25, SEC chair Gary Gensler offered a vague update on the progress of ETH ETF applications, stating “I don’t know the timing, but it’s going smoothly.” 

Gensler emphasized that the agency’s approval hinges on asset managers “making full disclosures” in their paperwork, stressing the importance of regulatory compliance and partially placing the responsibility for approval back onto the asset managers.

The SEC chair further deflected the question of when approval would be granted, stating that such decisions fall under the purview of the SEC’s Corporation Finance Division.

Despite ongoing uncertainties around Ethereum ETF approvals, there are signs that the SEC’s prior stance on Ethereum has flipped.

No Securities Violations Noted

In an unexpected turn of events, the SEC abruptly closed its investigation into Ethereum, marking a significant shift in its regulatory approach. This decision comes after years of ambiguity and seemingly contradictory stances from the SEC regarding Ethereum’s legal status according to the securities agency.

The SEC initially declared in 2018 that Ether was not a security, but recently, it emerged that the agency’s position shifted following Ethereum’s transition to a proof-of-stake protocol in December 2022, known as the “Merge.” 

Although the SEC has ended its investigation into Ethereum without charges, ConsenSys continues to pursue its lawsuit against the SEC with the hope of establishing regulatory clarity in the cryptocurrency space.

On the Flipside

• Hong Kong spot ETH ETFs opened at $45 million on April 30 and net outflows have decreased their valuation to $41.9 million .
• ETH ETF approval is widely tipped to lead to other altcoin ETF applications.

Why This Matters

Gensler remains elusive on an exact go-live date for spot ETH ETFs. A similar situation occurred with spot BTC ETFs, where weeks of anticipation led to approval and trading the next day.

Bitwise expects major success for Ethereum ETF products:
Bitwise Predicts $15B Ethereum ETF Inflows Amid Approval Hopes

Market turmoil sees Peter Schiff push the Bitcoin bear market narrative:
Peter Schiff Warns Bitcoin Plunge Is Far from Over