Spot Ethereum ETFs Expected to Launch in the U.S. This Summer, SEC Chairman Says

The Securities and Exchange Commission (SEC) chairman, Gary Gensler, anticipates that spot Ethereum ETFs will be approved and become operational in the United States this summer. During a Senate hearing on Thursday, Gensler mentioned that the registration process for individual issuers is progressing smoothly, and he envisions their approval sometime in the coming months.

The SEC recently granted approval to 19b-4 applications from stock exchanges to list spot Ethereum ETFs. Now, all that remains is the regulatory nod on the applications from the issuers themselves. Once obtained, spot Ethereum ETFs can immediately go live in the U.S.

Last summer, Ethereum futures ETFs were launched successfully, and CME Ether futures have been in existence for several years. Although the demand for futures ETFs was limited, industry analysts, including K33 Research, expect the spot products to attract significant interest. It is projected that these new ETFs could amass up to $4 billion in the first five months alone, representing approximately 20% to 30% of the flows observed in their Bitcoin-based counterparts.

The timeline proposed by Chairman Gensler aligns with Bloomberg's ETF experts, who anticipate that it would take several weeks to months for the S-1 registration documents to receive approval after the 19b-4 approvals. However, the introduction of Ethereum ETFs in the U.S. is considered a matter of "if" rather than "when."

Despite confirming the forthcoming launch of spot Ethereum ETFs, Gensler did not directly address whether Ethereum should be categorized as a security or a commodity when pressed on the matter. Legal experts argue that Ethereum has implicitly been classified as a commodity by being approved as a single-asset ETF product.

In addition to providing insights on ETFs, Chairman Gensler expressed concerns regarding a provision included in the House Appropriations Committee's fiscal year 2025 funding bill. The provision restricts the SEC from carrying out enforcement actions related to digital asset transactions, unless fraud or market manipulation is involved. Gensler voiced apprehension, stating that this stipulation would hinder their efforts, as cryptocurrencies that qualify as securities must disclose complete and fair information to the public.

The launch of spot Ethereum ETFs in the U.S. is eagerly anticipated by investors and industry participants alike. As the regulatory process continues to move forward, market observers eagerly await the official approval that will allow these investment vehicles to enter the market, potentially bringing significant inflows and bolstering the popularity of Ethereum as a viable investment option.