The crypto industry is on the verge of a potentially significant development as key figures in the sector hint at the imminent approval of a spot Ethereum ETF in the United States, possibly triggering a notable price rally for ETH.
Nate Geraci, president of The ETF Store, shared insights into the expected timeline for the launch of the first spot Ethereum ETF.

According to Geraci, current forecasts by Bloomberg predict a mid-July launch. He detailed the procedural timeline via X, stating, “Wen spot eth ETF? BBG sticking w/ mid-July. Amended S-1s due July 8th. Potential final S-1s by July 12th. Would theoretically mean launch week of July 15th.”

In parallel, Steve Kurz, head of asset management at Galaxy Digital, confirmed to Bloomberg on July 2 that the U.S. Securities and Exchange Commission (SEC) might greenlight a spot Ethereum ETF before the month’s end.

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Kurz emphasized the extensive groundwork laid in collaboration with the SEC, drawing parallels between the proposed Ethereum ETF and Galaxy’s existing spot Bitcoin ETF (BTCO), created with Invesco. Kurz expressed confidence in their preparedness, remarking, “We know the plumbing, we know the process… The SEC is engaged.”

Bloomberg ETF analyst Eric Balchunas also chimed in, aligning with the mid-July expectations. He highlighted the SEC’s recent instructions to Ethereum ETF issuers for amending their S-1 registration forms by July 8, suggesting possible further amendments. Notably, the SEC approved rule changes under 19-b4 in May, facilitating the listing and trading of such funds, though the issuance of funds remained pending final approvals.

Ethereum Price Holds Above Key Support

The anticipation of these approvals appears to be having a stabilizing effect on Ethereum prices. Crypto analyst IncomeSharks, commenting on Ethereum’s current price trajectory via X, noted optimism for a near-term breakout, stating, “ETH – Looking more optimistic for a Q3 breakout. Liking the chances of a run towards $4,000 this or next month.” According to the chart shared by him, ETH price needs to hold the region of $3,300 to $3,350 in order to rally to $4,000.

Supporting this sentiment, Cold Blooded Shiller highlighted the crucial need for Ethereum to demonstrate momentum at the current price levels, specifically around the $3,400 mark, as a key indicator for a potential high-time-frame impulse.

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“ETH is still in a fine position but it really needs to start showing some momentum soon. LTF divergences around this $3400 low are probably where I take one stab at trying to capture any HTF impulse away from the consolidation,” he remarked via X.

Adding historical perspective, analyst Jelle (@CryptoJelleNL) compared the current market phase to Ethereum’s long consolidation in 2016-2017 before its massive rally, urging persistence and optimism: “In 2016-2017, ETH consolidated for 50+ weeks before rallying nearly 12000 percent. Today, people are giving up after less than 20 weeks, with ETH ETFs right around the corner. Stick to the plan boys. The best is yet to come.”

At press time, ETH traded at $3,353.

Featured image created with DALL·E, chart from TradingView.com

Ethereum (ETH) price has encountered a setback after briefly surpassing the $3,500 mark on Monday, dropping once again to the $3,400 support level on Tuesday. The delay stems from the expected full approval by the SEC for Ethereum ETF applications, which have now been postponed to July 8.

SEC Requests Revised Filings

Analysts had initially anticipated approval by July 2, but the SEC has requested issuers to submit revised filings by July 8. Bloomberg ETF expert Erich Balchunas shared on social media that the SEC took additional time to provide feedback, resulting in a revised timeline. Balchunas stated: 

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

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SEC Chair Gary Gensler previously indicated that Ethereum ETFs would likely receive approval by “the end of the summer.” The SEC is currently reviewing and approving the S-1 forms, which represent the second step in launching spot Ethereum ETFs. 

Despite the delay, asset managers remain optimistic about the SEC greenlighting the first US spot Ethereum ETF applications that directly invest in Ether, with expectations set for mid-July. A recent Bloomberg report highlighted the constructive dialogue between asset managers and the regulator.

Ethereum ETF Launch Inches Closer

Per the report, the regulator’s feedback provided minor questions that issuers are currently addressing. In May, the SEC approved the proposal by exchanges to list these products, requiring a separate approval for their launch.

Steve Kurz, head of asset management at Galaxy Digital, predicted the approval of an Ethereum ETF within the next couple of weeks. Galaxy Digital has filed for an Ether ETF, and Kurz expressed confidence in the process, emphasizing their familiarity with the requirements based on their experience with the Bitcoin ETF.

Several prominent firms, including BlackRock Inc., Fidelity Investments, 21Shares, and Invesco, have filings awaiting approval. The disclosure of fees on the respective funds is a necessary step before trading commences.

Assuming the funds receive a green light, one key question remains: Will Ether portfolios generate a similar level of demand as the historic debut of US spot-Bitcoin ETFs in January, which accumulated $52 billion in assets?

 $15 Billion In Inflows Within First 18 Months

As previously reported by NewsBTC, Ethereum ETFs may attract significant inflows in the first few months of trading, although they may not have the same volume of inflows as the newly approved Bitcoin ETF market. 

In a note to investors Bitwise’s Chief Investment Officer (CIO), Matt Hougan projected that these ETFs could see $15 billion in net inflows within their first 18 months of trading. 

To arrive at this estimate, Hougan considered the market capitalizations of Bitcoin and Ethereum, expecting investors to allocate to their respective exchange-traded products (ETPs) proportionally.

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Hougan pointed out that US investors have already invested $56 billion in Spot Bitcoin ETPs, and he anticipates this figure to reach $100 billion or more by the end of 2025. 

Drawing from this reference, he determined that Spot Ethereum ETFs would need to attract $35 billion in assets to match the Bitcoin ETFs, a process that could take around 18 months. 

Additionally, he noted that the Spot Ethereum ETFs would launch with $10 billion in assets, thanks to the conversion of the Grayscale Ethereum Trust (ETHE) into an ETF.

At the time of writing, ETH is trading at $3,418, recording significant losses in the monthly time frame amounting to over 9%. 

Featured image from DALL-E, chart from TradingView.com

Crypto investment products tracking Ethereum and others registered another week of outflows last week, albeit at a lesser amount, to extend the run of outflows to three consecutive weeks. Digital investment products witnessed $30 million worth of outflows last week.

However, this outflow deviated from the trend we normally observe, with Bitcoin taking a step back and most of the movement coming from Ethereum-based investment products. Particularly, the latest CoinShares report shows that institutional investors pulled a whopping $60.7 million from Ethereum-based investment products in just one week, the largest so far this year. 

Ethereum Leads The Outflows

CoinShares’ latest Digital Asset Fund Flows Weekly report suggests that institutional investor sentiment regarding Bitcoin is changing into a bullish one. Notably, Bitcoin-based products registered $10 million worth of inflows last week. While this is small compared to the normal level of inflows usually witnessed by the crypto asset, the fact that its inflow suggests a lingering bullish sentiment regarding Bitcoin despite a poor price performance last week.

On the other hand, the same can’t be said for Ethereum. Institutional investor sentiment regarding the king of altcoins seems to be waning as the launch of Spot Ethereum ETFs continues to drag on. Ethereum-based saw outflows of $61 million last week, the largest since August 2022.

Consequently, this means the asset has lost $119 million worth of institutional investment in the past two weeks, making it the worst-performing asset year-to-date in terms of net flows. This is backed up by data from CoinShares, which shows Ethereum’s year-to-date outflows now at $25 million. Furthermore, the data indicates Ethereum is the only digital asset with a net outflow since the beginning of the year.

Every other digital asset product registered inflows last week. Multi-asset products led the charge with $17.9 million worth of inflows. Bitcoin came in second with $10 million worth of inflows. Solana, Litecoin, XRP, and Chainlink also witnessed minor inflows of $1.6 million, $1.4 million, $0.3 million, and $0.6 million outflows, respectively. This influx of money suggests institutional investors are still willing to put money into altcoins despite the poor price performance of most of them last week. 

Reflecting the bullish sentiment, short-bitcoin products witnessed $4.2 million worth of outflows. Trading volumes also rose by 43% week-on-week to $6.2 billion but remained well below the $14.2 billion weekly average for the year. 

According to CoinShares, most providers saw minor inflows, although most of this was canceled out by $153 million in outflows from Grayscale. In terms of region, the US-dominated again with $43 million. Brazil and Australia followed with $7.6 million and $2.9 million inflows respectively. On the other hand, Germany, Hong Kong, Canada, Switzerland, and Sweden all witnessed outflows of $28.5 million, $23.2 million, $14.4 million, $13.3 million, and $4.3 million, respectively.

Featured image created with Dall.E, chart from Tradingview.com