Ethereum ETH
+2.11%
The ETF has now been approved and will likely become active within a few hours, unlike the Bitcoin ETF which began trading the day after approval. Weeks or months.
This delay is because ETFs must verify that their S-1 registration statement is valid before they can begin trading, even though the U.S. Securities and Exchange Commission has approved Form 19b-4. This is an early stage and timing will depend on how quickly institutions can provide feedback to issuers. But even if this feels hopeless after last-minute changes in circumstances, traders insist this is a good thing.
“Everyone was expecting the ETF not to be approved,” said Zaheer Ebtikar, co-founder of Split Capital. “Then very quickly we were back in a market where everyone was offside.”
Ebtikar explained that if the product had started trading immediately, there would have been much more violent price action. Instead, the delay gives market participants time to pre-execute potential inflows into the ETF. He pointed out that even with a conservative estimate of 15% of Bitcoin ETF inflows, this would still be a significant value.
This is consistent with the views of eToro analyst Simon Peters. “With 19b-4s coming to an end, now could be an opportunity for savvy cryptocurrency investors to purchase Ethereum in anticipation of S-1 approval,” he said. ETFs will become active and potentially billions of dollars will flow into them.”
Peters added that the price of Bitcoin hit an all-time high after the ETF was launched, and questioned whether that would happen for Ether as well. He pointed out that Ethereum is currently about 35% off its all-time high.
GSR research analyst Brian Rudick said, “19b-4 approval has been the biggest surprise, so the delay won’t have that much of an impact, but it’s a minor positive. So the delay will build anticipation and publicity for the launch.” .” he agreed. “All other things being equal, this should help generate early inflows into the product, which should benefit the price of ETH.”
Arete Capital co-founder Ilya Paveliev said traders, unaware of the SEC’s 11th-hour correction, flocked to leverage to capture early momentum as open interest rose 26%. He said this was likely to be reversed as short-term traders took profits, but said the launch of ETFs would increase spot trading volumes.
“The expected daily net spot inflows for the ETH ETF are $20-40 million, 15-30% of the BTC ETF, combined with low foreign exchange reserves and 30% of ETH supply locked in staking, setting the stage for supply-limited price pressures. We have prepared it. ” said Paveliev.
It’s unclear when the S-1 will go into effect, but JPMorgan analysts said they expect the deal to begin.long before november.”
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