The US financial markets watchdog may rule on spot Ethereum ETFs as soon as this week or next.
On Monday, VanEck, the $89.5 billion asset management firm, filed an S-1 form with the US Securities and Exchange Commission (SEC) for its spot VanEck Ethereum Trust, marking a key step in the approval process for the next wave of cryptocurrency spot exchange-traded funds.
Approved earlier this year, the Ethereum ETF will be the second crypto-based ETF in the US.
VanEck, which previously predicted the ether-dollar rate could reach $22,000 by 2030, from just under $3,000 today, has waived its initial fee and will charge 0.2% if assets surpass $1.5 billion
A spot ether ETF would allow investors to gain exposure to the price movements of ether (ETH), the native cryptocurrency of the Ethereum blockchain, without directly owning the cryptocurrency.
Unlike futures-based ETFs, which track the price of futures contracts, a spot ETF holds the actual asset — in this case, ETH.
Dramatic reversal
ETC Group CEO Tim Bevan recently discussed the regulatory landscape and the potential impact of these ETFs on the cryptocurrency market with Proactive. ETC Group creates and manages exchange-traded products that provide investors with secure and regulated access to cryptocurrency markets, bridging the gap between traditional financial systems and digital assets.
"We heard some weeks ago a dramatic reversal in the US in terms of policy and attitude towards Ethereum," Bevan told Proactive, underscoring the shift towards regulatory approval for Ethereum ETFs.
Initial expectations had put a launch by the end of summer or autumn, but recent developments suggest it could happen sooner.
"There's been a lot of movement over the last couple of weeks between the SEC and the issuers," Bevan said, pointing out ongoing discussions and clarifications needed before the ETFs can debut.
While acknowledging Ethereum's smaller size compared to Bitcoin in assets under management, Bevan emphasized its potential sensitivity to market inflows. "Ethereum is six times more sensitive to inflow in terms of price reaction," he explained, highlighting its responsiveness to investor sentiment and ETF flows.
Substantial initial inflows
That could lead to substantial initial inflows into Ethereum ETFs. In the first three months, Bevan is expecting “one and a half to two billion inflow”, suggesting a potential short-term price increase of up to 20% due to heightened investor interest and ETF adoption.
Bevan also touched on competitive dynamics, mentioning Solana's application for SEC approval as indicative of expanding opportunities for crypto ETFs. However, he cautioned about the lack of a tradable future for other cryptocurrencies outside Bitcoin and Ethereum, which could slow regulatory approvals.
It’s a pivotal moment for Ethereum and the broader cryptocurrency ecosystem, according to Bevan.
"The launch of these products will bring a renewed focus from investors," he concluded.