Ethereum enthusiasts were cruising down the information superhighway towards a July 4th fireworks celebration of a different kind: the launch of the first spot Ethereum ETF.
Investor excitement was dampened when the US Securities and Exchange Commission unexpectedly sent back applicants’ proposals, delaying the much-anticipated debut.
Missed Exit: Ethereum ETF July Launch Goes Up In Smoke
The news came as a shock to many, as market watchers and analysts alike had confidently predicted a July launch, with some even suggesting a celebratory trade on Independence Day.
Bloomberg ETF analysts Eric Balchunas and James Seyffart were among those waving the checkered flag a little too early. Their prediction of a July 2nd debut went kaput after the SEC decided to put the brakes on the process.
Unfort think we gonna have to push back our over/under till after holiday. Sounds like SEC took extra time to get back to ppl this wk (altho again very light tweaks) and from what I hear next wk is dead bc holiday = July 8th the process resumes and soon after that they’ll launch… https://t.co/0ZQR7yiBLt
— Eric Balchunas (@EricBalchunas) June 28, 2024
Insiders claim that the SEC has delayed the anticipated debut date by requesting changes to the S-1 documents that issuers have submitted.
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 examine the entity before it offers shares to the public for the first time.
Now, this unexpected diversion raises serious concerns about the schedule as a whole. Although there are others who anticipate the green light by July 8th, the impending US holiday probably adds another layer of wrinkle.
Uncharted Territory: The SEC Takes The Wheel
For issuers and investors alike, the absence of a clear timetable is a major source of discomfort. In contrast to the earlier 19b-4 forms, which required the SEC to make a decision within a certain amount of time, the S-1 filing process allows the regulatory body as much time as it needs. This essentially grants the SEC complete control, allowing them to conduct a comprehensive assessment and submit change requests without feeling rushed.
Although Gary Gensler, the chairman of the Securities and Exchange Commission, has previously suggested that approvals may occur “sometime this summer,” his statements have failed to provide the market with much comfort. The recent snafu with the S-1 forms suggests that even a summer launch may be unduly optimistic.
The Road Ahead
Investors and issuers are currently in a state of uncertainty as a result of the SEC’s recent actions, which have disrupted the timeline. Approval may still occur this summer; however, the absence of clarity suggests that these highly anticipated investment vehicles will face a challenging journey.
Featured image from Pexels, chart from TradingView