Asset managers are currently optimistic about the possibility of the Security and Exchange Commission (SEC) approving the first U.S. ETFs directly investing in Ethereum. They believe that approval could come as early as mid-July. The SEC has set a deadline of July 8 for ETF applicants to submit updated paperwork and amended S-1s, with potential additional rounds of filings expected. Despite this, some major asset managers such as BlackRock, Fidelity, Ark 21Shares, and Invesco still have pending filings.
Potential Impact on Ethereum Market
There is speculation about how the approval of Ethereum ETFs will impact the market. While analysts predict that Ethereum ETF flows could be around 10% to 15% of Bitcoin ETF flows, there are concerns that ETH prices may fall by as much as 30% following their launch. However, a crypto research firm, K33 Research, expects Ethereum to outperform Bitcoin in July. The firm believes that ETFs will serve as a catalyst for relative ETH strength as the summer progresses and flows accumulate.
Current Market Trends
Despite the optimism surrounding Ethereum ETFs, the cryptocurrency market is facing challenges. For instance, Bitcoin is experiencing potential selling pressure due to an upcoming distribution of almost $9 billion worth of BTC related to the defunct Mt. Gox exchange. On the other hand, Ethereum prices are not showing any positive momentum, with the asset falling 3% to an intraday low of $3,342 during Asian trading. ETH is currently 17% down from its 2024 peak of just over $4,000 and 31% down from its November 2021 all-time high.
While asset managers are hopeful about the approval of Ethereum ETFs by the SEC, the market remains uncertain. There are concerns about potential price fluctuations following the launch of these ETFs, as well as broader market challenges affecting cryptocurrencies like Bitcoin and Ethereum. As the deadline for ETF applicants approaches, investors are closely monitoring developments in the cryptocurrency market to gauge the impact of this regulatory decision.