Ethereum Spot ETF set to launch soon how are institutions viewing this

Original | Odaily Planet Daily
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Since the US Securities and Exchange Commission (SEC) approved the 19b-4 document for the Ethereum spot ETF 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 and no later than September 20 (US summer time).
What does the actual launch of the product mean for Ethereum, altcoins, and the crypto industry? Odaily Planet Daily has compiled analysts’ and institutions’ views on the launch of the Ethereum spot ETF over the past few weeks.
Different views
Bernstein analysts point out that after Biden vetoed the SAB 121 repeal bill, the credibility of the political background behind the approval of the Ethereum ETF by the SEC has decreased. They believe that the SEC’s decision is more practical to avoid legal disputes. Analysts also point out that when approving the Ethereum spot ETF, the SEC may have considered a balance between market demand and legal challenges.
VanEck CEO Jan van Eck stated that there has been a significant shift in the sentiment of the crypto market, which is related to the rule changes that led to the approval of the Ethereum spot ETF by the SEC. He believes this is one of the most surprising things in his career in securities regulation. Eck pointed out that the SEC may lose jurisdiction over digital assets, so approving the Ethereum spot ETF is an important 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 points 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, indicating a higher status for Bitcoin among investors.
JPMorgan Chase 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 scale may not be as large as the Bitcoin spot ETF. Panigirtzoglou also points out that Ethereum’s technical advantage and widespread applications are the main factors attracting investors.
Bloomberg Senior ETF Analyst Eric Balchunas stated that the Ethereum spot ETF may struggle to attract 20% of the assets of the Bitcoin ETF. He believes that the attractiveness of the Ethereum spot ETF is somewhat limited by its market recognition and investor base. Balchunas also points 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 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 points out that as the ETF attracts significant investments, the market supply of Ethereum will be significantly affected, pushing up prices.
Jag Kooner, Derivatives Head at Bitfinex, stated that the Ethereum spot ETF can 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 refuse collateral for the spot Ethereum ETF in the future.
SEC Chairman Gary Gensler stated that the listing time of the spot Ethereum ETF largely depends on the issuer’s response speed to the SEC’s inquiries. The SEC still needs to approve the registration statement of the ETF issuer, which details investor disclosures. This process typically involves a lot of communication between the ETF issuer and SEC officials. The approval process of the spot Ethereum ETF is influenced by various factors, including market demand, legal challenges, and internal evaluations at the SEC. He emphasized that the SEC will expeditiously complete the review of the S-1 document while ensuring market transparency and protecting investor interests.
Whether the Ethereum spot ETF has collateral functionality or will affect future price increases
Combining the above, the statements from various institutions and analysts have shifted from whether the Ethereum spot ETF can be approved to whether it can have collateral functionality. As the core function and source of income for a PoS public chain, collateral functionality has become a key factor affecting market fluctuations after the approval of the Ethereum spot ETF. This has led to new expectations for price fluctuations in the market regarding whether it has collateral functionality.
However, CryptoQuant data shows that from May 23 to June 2, CEX Ethereum reserves decreased by 797,000 coins, worth approximately $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.
Additionally, on June 12th, Coinbase saw an outflow of over 336,000 ETH, setting a new record for the highest daily outflow this year, valued at over $1 billion. CryptoQuant analysis suggests that if these withdrawals are not internal movements within exchanges, it may indicate a very optimistic long-term outlook for Ethereum. It is worth noting that CryptoQuant analysts also pointed out similar activity on Coinbase prior to the start of trading of the Bitcoin spot ETF.
To a certain extent, such activity reflects market expectations for a price increase after the launch of the Ethereum spot ETF. Whether it has collateral functionality 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 document. It is expected that this summer will be a crucial period, and after the launch, the Ethereum market will experience a new round of changes. Investors need to closely monitor the SEC’s developments and market reactions in order to adjust their investment strategies in a timely manner.