- Spot Ethereum ETFs are expected to launch on Tuesday after receiving final approval from the SEC on Monday after market close.
- Rumors range from as little as 3 to all 10 of the current applicants receiving final approval on Monday.
1st Round of Spot Ethereum ETFs to Launch on July 23
The long and tumultuous saga of spot Ethereum ETF approval seems to finally be coming to a close.
At least 3 of the prospective spot Ethereum ETF issuers will receive final approval from the Securities and Exchange Commission (SEC) after the market closes on Monday.
It is expected that these ETFs will then be live when the market opens the following Tuesday.
This final approval follows a long and difficult path for spot Ethereum ETFs.
In late April of 2024, insiders were predicting that these ETFs would remain in limbo for the foreseeable future.
However, there was a sudden regulatory reversal in May as crypto became a key topic in the 2024 U.S. elections.
There are currently 10 spot Ethereum ETFs waiting for final approval from the SEC.
Various rumors suggest that 3, 8 or all 10 might be approved on Monday, the difference being when they submitted their final S-1 filings.
Most of the fees listed in the S-1 filings are around 0.2%, with the Grayscale Trust being a significant outlier with a 2.5% fee.
However, analysts are predicting that there will be a race to the bottom that will drive these fees lower over the next 6 months.
Will Spot Ethereum ETFs See Similar Inflows as Bitcoin?
Estimates of the potential inflows into these spot Ethereum ETFs vary widely.
The spot Bitcoin (BTC) ETFs saw inflows of $13 billion to $15 billion in the first 6 months of trading.
Considering their relative market caps, this would imply around $5 billion in inflows into the Ethereum ETFs in the first 6 months.
“Everyone wants to know what will happen to the price of ETH after the spot ETFs launch. Here’s my prediction: ETF inflows will push prices to all-time highs, above $5,000. Not immediately—in fact, I think the first few weeks could be choppy, as money may flow out of the $11 billion Grayscale Ethereum Trust (ETHE) after it converts to an ETF. But by year-end, I’m confident the new highs will be in. And if flows are stronger than many market commentators expect, the price could be much higher still.”
– Matt Hougan, CIO of Bitwise Asset Management, stated.
Much of the demand for spot Bitcoin ETFs comes from institutions that use them in complex strategies alongside their positions in futures ETFs.
This institutional dynamic will likely also have the biggest influence on spot Ethereum ETF demand.
Ethereum Price Predictions: Supply and Demand
While price predictions for Ethereum following ETF approval vary widely, most estimates range from $5,000 to $6,500 within the next 6 months.
The increased demand from spot ETFs is likely to have a larger impact on Ethereum because of how its supply and demand dynamics operate.
Bitcoin had an approximately 1.7% inflation rate when its spot ETFs were launched.
While Ethereum also mints new tokens, this supply is negated by new developers using the blockchain.
Similarly, Bitcoin miners generally sell their tokens upon minting, while Ethereum miners generally stake them.
This effect is in addition to the approximately ~25% of all Ethereum tokens being used for staking at any given time.
The end result of this difference between Bitcoin’s Proof of Work (PoW) and Ethereum’s Proof of Stake (PoS) systems is that any increase in demand will have a much bigger impact on the price of Ethereum.
