ETH ETF June Launch? BlackRock Updates S-1 Form for Spot Ether ETF

TLDR

• BlackRock’s updated Form S-1 for its iShares Ethereum Trust (ETHA) suggests that the launch of U.S. spot Ether ETFs could be imminent, with analysts predicting a potential late June launch.
• The updated filing provides details about the ETF’s seed capital investor, a BlackRock affiliate firm that purchased $10 million worth of shares on May 21, 2024.
• The SEC had already approved BlackRock’s 19b-4 filing, and the updated S-1 form indicates progress in the engagement between issuers and the regulator.
• BlackRock’s filing reintroduces the possibility of in-kind creations and redemptions, allowing for crypto transactions among authorized participants, although approval is not guaranteed.

The prospect of U.S. spot Ether (ETH) exchange-traded funds (ETFs) launching by late June has gained momentum following BlackRock’s recent update to its Form S-1 for its iShares Ethereum Trust (ETHA).

The move, which comes nearly a week after the Securities and Exchange Commission (SEC) approved BlackRock’s 19b-4 filing, is seen as a crucial step towards the ETF’s approval and subsequent trading.

Analysts from Bloomberg, Eric Balchunas and James Seyffart, have expressed optimism about the development, considering it a positive sign of engagement between issuers like BlackRock and the SEC.

Balchunas believes that an end-of-June launch is a realistic possibility, although he still estimates the odds of approval around July 4, considering an earlier approval a long shot.

Good sign. Prob see rest roll in soon. Then prob one more round of fine-tune comments from Staff. End of June launch a legit possibility altho keeping my o/u date as July 4th https://t.co/WymshkTvat

— Eric Balchunas (@EricBalchunas) May 29, 2024

BlackRock’s updated filing provided details about the ETF’s seed capital investor, a BlackRock affiliate firm that agreed to purchase $10 million worth of shares on May 21, 2024, and took delivery of 400,000 shares priced at $25.00 per share. The filing also noted that the ETF would list and trade under the ticker “ETHA.”

The latest S-1 filing reintroduces the possibility of in-kind creations and redemptions, which would allow for crypto transactions among authorized participants.

However, the filing acknowledges that approval of in-kind transactions is not guaranteed and that timing is uncertain.

As the prospect of spot Ethereum ETFs draws closer, analysts anticipate that their introduction will drive the price of ETH to new highs, as some view it as a Wall Street bet on the growth of Web3.

However, there are also concerns about potential price pressure on ETH due to the Grayscale Ethereum Trust (ETHE). As the ETHE converts and its discount narrows, analysts predict average daily outflows of around $110 million for several weeks.

The recent approval of Ethereum ETFs has also opened the doors for more crypto investment products, according to research from TD Cowen’s Washington Research Group.

While the speed of approval caught some off guard, the research group viewed it as an inevitable outcome following the approval of Bitcoin ETFs earlier this year.

The approval of spot ETH ETFs potentially confirms Ether’s status as a non-security, according to industry experts.

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