Ethereum Spot ETF Set to Launch How Are Institutions Viewing It

Original | Odaily Planet Daily
Author | How is the husband


Since the US Securities and Exchange Commission (SEC) approved the Ethereum spot ETF’s 19b-4 filing on May 23, the market has been eagerly anticipating the official launch of this product. SEC Chairman Gary Gensler recently stated that the Ethereum spot ETF may officially launch this summer. The DTCC official website has also listed the Ethereum spot ETF “INVESCO GALAXY ETHEREUM ETF SHS” (code QETH) jointly launched by Invesco and Galaxy, with the Create/Redeem column showing as N.
With SEC Chairman Gary Gensler’s statement, the timeline for the launch of the Ethereum spot ETF is clearer: it could be approved as early as June 20, or as late as September 20 (US summer time).
What does the actual launch of the product mean for Ethereum, altcoins, and the cryptocurrency industry? Odaily Planet Daily has compiled the views of analysts and institutions on the launch of the Ethereum spot ETF product in recent weeks.
Various perspectives
Analysts at Bernstein pointed out that after President Biden vetoed the SAB 121 repeal bill, the credibility of the political background behind the SEC’s approval of the Ethereum ETF has decreased. They believe that the SEC’s decision is more pragmatic, to avoid legal disputes. Analysts also pointed out that when approving the Ethereum spot ETF, the SEC may have considered a balance between market demand and legal challenges.
Jan van Eck, CEO of VanEck, stated that there has been a significant shift in sentiment in the crypto market, which is related to the rule changes allowing the SEC to approve the Ethereum spot ETF. He believes this is one of the most surprising things he has seen in his career in securities regulation. Eck pointed out that the SEC may be losing jurisdiction over digital assets, so approving the Ethereum spot ETF is a significant strategic adjustment.
Caroline Bowler, CEO of BTC Markets Pty, believes that the demand for the Ethereum spot ETF may be much lower than that of the Bitcoin spot ETF. She pointed out that Ethereum’s popularity and market influence are not as high as Bitcoin, so the market demand for the Ethereum spot ETF may be limited. With a market value of $1.4 trillion, Bitcoin is three times that of Ethereum, meaning Bitcoin has a higher status in investors’ minds.
JPMorgan strategist Nikolaos Panigirtzoglou estimates that the Ethereum spot ETF will attract net inflows of $10 billion to $30 billion this year. He believes that this influx of funds will have a positive impact on the Ethereum market, although its size may not be as large as the Bitcoin spot ETF. Panigirtzoglou also pointed out that Ethereum’s technical advantages and widespread applications are the main factors attracting investors.
Eric Balchunas, senior ETF analyst at Bloomberg, stated that the Ethereum spot ETF may struggle to attract 20% of the assets of a Bitcoin ETF. He believes that the attractiveness of the Ethereum spot ETF is somewhat limited by its market visibility and investor base. Balchunas also pointed out that while the Ethereum spot ETF will attract some inflows, its overall market impact may be limited.
Vetle Lunde, senior research analyst at K 33 Research, is optimistic, expecting net inflows of $40 billion in the first five months, bringing about a “huge supply absorption impact.” He believes that the launch of the Ethereum spot ETF will have a positive impact on the market, especially in terms of supply. Lunde pointed out that as ETFs attract significant investments, the market supply of Ethereum will be significantly affected, thereby driving up prices.
Jag Kooner, Head of Derivatives at Bitfinex, stated that the Ethereum spot ETF could attract 10-20% of the funds currently flowing into the Bitcoin ETF. The current inflow situation of the Ethereum spot ETF largely depends on whether the SEC will allow or reject collateral for the spot Ethereum ETF in the future.
SEC Chairman Gary Gensler stated that the listing time of the Ethereum spot ETF largely depends on the speed of the issuer’s response to the SEC inquiries. The SEC still needs to approve the registration statement of the ETF issuer, which details investor disclosures. This process typically involves extensive communication between ETF issuers and SEC officials. The approval process of the Ethereum spot ETF is influenced by various factors, including market demand, legal challenges, and internal evaluations by the SEC. He emphasized that the SEC will expedite the review of the S-1 filing while ensuring market transparency and protecting investor interests.
Whether the Ethereum spot ETF has collateral capabilities or will affect future price increases
Combining the above, the comments of various institutions and analysts have shifted from whether the Ethereum spot ETF can be approved to whether it can have collateral capabilities. As the core function and source of income of the PoS public chain, the collateral function has become a key factor affecting market fluctuations after the approval of the Ethereum spot ETF. This has led to new expectations in the market for price fluctuations based on whether it has collateral capabilities.
However, CryptoQuant data shows that from May 23 to June 2, the Ethereum reserves on CEX decreased by 797,000 coins, worth about $30.2 billion. This phenomenon indicates that the market’s expectations for the Ethereum spot ETF have led to a large outflow of Ethereum from exchanges.
Furthermore, on June 12, Coinbase saw an outflow of over 336,000 ETH, setting a new high for single-day outflows this year, worth over $1 billion. CryptoQuant analysis suggests that if these withdrawals are not internal movements within exchanges, this may indicate a very optimistic long-term outlook for Ethereum. It is worth noting that CryptoQuant analysts also pointed out similar activities on Coinbase before the start of trading of the Bitcoin spot ETF.
To a certain extent, these activities reflect market expectations for price increases after the launch of the Ethereum spot ETF. Whether it has collateral capabilities may only be reflected in the magnitude of the price increase. However, despite the market and various institutions being optimistic about the Ethereum spot ETF, its official launch date still depends on the progress of the SEC’s review of the S-1 filing. The summer of this year is expected to be a critical period, and the Ethereum market will see a new round of changes after its launch. Investors need to closely monitor the dynamics of the SEC and market reactions in order to adjust their investment strategies in a timely manner.