Ethereum Spot ETFs: When Will They Begin Trading In The Event Of An SEC Approval?

Bloomberg analyst James Seyffart has provided insights into when the Spot Ethereum ETFs could begin trading if the Securities and Exchange Commission (SEC) were to approve these funds. Based on his remarks, it could take weeks to months before these funds launch, even if an approval would come this week. 

S-1 Filings Need To Be Approved Before Trading Can Commence 

Seyffart mentioned in an X (formerly Twitter) post that the S-1 approvals are needed before the Spot Ethereum ETFs can go live and that it could take “weeks to months” for this approval to come in. He made this statement while clarifying that their 75% approval odds only related to the deadline for the 19b-4 filings, with VanEck’s and Ark 21Shares’ final deadline coming up on May 23 and 24, respectively. 

Seyffart and his colleague Eric Balchunas predict that the SEC will likely approve at least VanEck’s application on or before May 23 since this is the final deadline for the Commission to decide on it. Before now, the SEC was expected to deny these applications, mainly because there were reports that it considered Ethereum a security. 

However, Balchunas revealed in an X post that the Commission had become willing to approve these funds due to an “increasingly political issue.” The SEC has already shown a willingness to approve these funds, having informed Nasdaq, the Chicago Board Options Exchange (CBOE), and the New York Stock Exchange (NYSE) to update their filings.

Insiders have also claimed that the SEC’s feedback to these exchanges is a positive signal and shows that the regulator might be ready to approve these investment funds. Steven McClurg, the head of US asset management for CoinShares, also told Reuters that it could take months for the Ethereum ETFs to begin trading since, unlike the exchange filings, there is no set timeframe for the SEC to approve the registration filings.  

However, the SEC has shown that it can approve both the 19b-4 and S-1 filings simultaneously, just like it did with the Spot Bitcoin ETFs, which immediately went live thanks to this. The only difference between then and now is that the SEC constantly communicated with the issuers weeks before the Bitcoin ETFs were approved. 

Fidelity And Grayscale Remove Staking Plans From Ethereum Spot ETFs

Asset managers Fidelity and Grayscale have removed their staking plans in their updated S1-filings. This was expected, considering that the staking feature is a huge part of why the SEC is rumored to consider ETH a security. However, removing this staking offering again suggests that the SEC will approve these funds as long as ETH staking isn’t included. 

Meanwhile, Seyffart noted in an X post that their approval odds still stand at 75% since the removal of the staking plans was expected.  

At the time of writing, Ethereum is trading around $3,700, up over 3% in the last 24 hours, according to data from CoinMarketCap. 

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