Cryptocurrency investors were shocked when the SEC suddenly approved spot ETH ETFs. Now, it’s time for the second shock regarding Ether ETFs. Issuers are updating their S-1 Forms on the last business day of the week. These updates indicate that the listing process is nearing completion.
Latest Developments in Spot Ether ETFs
The SEC is expected to approve the necessary S-1 Forms for exchange listings next week. Normally, listings on exchanges should occur around July 2. With these listings, investors familiar with traditional markets will be able to buy and sell ETH via ETFs, just like they do with BTC.
Ethereum is expected to attract significant interest from long-term investors due to its growth potential, early adoption by massive financial institutions in the RWA sector, and its monopolistic position in the smart contract world.
However, there are two important stories here. First, like the BTC ETF approval, we might see a “sell the news” scenario after the listing. This possibility might have weakened with ETH’s price drop to $3,500 triggered by BTC’s price decline. But the second issue is a significant risk. After the initial listing, GBTC experienced prolonged net outflows due to rapid sales by investors who benefited from the negative premium. The same could happen to ETHE, which was bought at up to 50% negative premium 6-12 months ago, with the spot price rising alongside BTC’s price increase.
Grayscale has not yet included the management fee in the ETF filing. This raises the question of whether they might set the management fee to zero to balance out rapid sales. For ETHE holders focused on long-term goals, setting an attractive transaction fee is necessary to keep them from switching to lower alternatives while using the strong liquidity advantage. Some GBTC sales were also driven by the high transaction fee, causing a shift to alternatives like BlackRock.
Today’s S-1 Form updates, which lack transaction fees, indicate that the final versions of the forms will be available by the end of business next Friday. So, the final date for July 2 is next Friday.
