Ether ETF Hopefuls Gear Up for SEC Approval as Soon as Mid-July

Emily Graffeo and Olga Kharif, Bloomberg News

, Bloomberg

(Bloomberg) -- Asset managers are optimistic that the SEC will greenlight the first US ETFs that invest directly in Ether as soon as mid-July, saying the back and forth with the regulator remains constructive.

Despite earlier market speculation that approval would land during the July 4 holiday week, the Securities and Exchange Commission has told Ether exchange-traded fund applicants that they have until July 8 to submit updated paperwork, according to two people familiar with the matter. There may be an additional round of filings after the round due on Friday.

The US regulator’s recent feedback to issuers on last Friday consisted of minor questions that issuers are now addressing, said the people. In May, the SEC signed off on a proposal by exchanges to list the products. A separate approval is needed before they can be launched.

Steve Kurz, head of asset management at Galaxy Digital, predicted that an Ether ETF will be approved within the span of the next couple of weeks. Galaxy has filed for an Ether ETF, he said.

“This is window-dressing, the SEC is engaged,” Kurz said during a Bloomberg TV interview on Tuesday. “We’ve been doing this for months now. We did it for the Bitcoin ETF, the products are substantially similar — we know the plumbing, we know the process.”

Firms including BlackRock Inc., Fidelity Investments, 21Shares, and Invesco have filings waiting to be approved. Many issuers have not yet disclosed the fees on their respective funds, which is a necessary step before the funds start trading.

Assuming the funds get a green light, one key question is whether the Ether portfolios will generate anything like the demand stirred by the historic January debut of US spot-Bitcoin ETFs. The latter have amassed $52 billion in assets.

Ether dropped about 1.5% to $3,411 as of 1:00 pm in New York. The second-largest cryptocurrency after Bitcoin has risen around 50% so far this year.

--With assistance from Benjamin Taubman, Sonali Basak and Tim Stenovec.

(Adds comments from Galaxy’s Kurz, starting in the fourth paragraph.)