Ethereum fans have been heading into a Fourth of July fireworks celebration of a different kind: the launch of the first Ethereum spot trading fund.
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Investor enthusiasm waned when the U.S. Securities and Exchange Commission unexpectedly reinstated the applicants’ proposals, delaying the long-awaited offering.
Missed exit: July ETF launch goes up in smoke
The news has come as a shock to many, with market watchers and analysts alike confidently predicting Launching in JulySome even suggest a celebratory trade on Independence Day.
Bloomberg analysts Eric Balchunas and James Seyphart were among those who waved the checkered flag prematurely. Their expectations that the fund would emerge on July 2 evaporated after the US Securities and Exchange Commission decided to put an end to this process.
Unfortunately, I think we’ll have to postpone our forecasts until after the holiday. It seems like the SEC took extra time to get back to people this week (although with minor adjustments again) and from what I’ve heard, next week is over as holiday = July 8th, the process resumes and then soon they will be launching… https://t.co/0ZQR7yiBLt
— Eric Balchunas (@EricBalchunas) June 28, 2024
Insiders allege that the SEC delayed the expected issuance date by requiring changes to S-1 documents filed by issuers.
Think of the S-1 form as a company’s passport to going public. This first step in the rigorous SEC registration process provides all the details necessary for the regulator to examine the entity before offering shares to the public for the first time.
Now, this unexpected shift raises serious concerns about the timeline as a whole. Although others expect the green light to come by July 8, the impending American holiday may add another layer of complexity.
Uncharted Territory: The SEC Takes the Steering Wheel
For issuers and investors alike, the absence of a clear timeline is a major inconvenience. In contrast to previous Forms 19b-4, which required the SEC to make a decision within a certain period of time, the Form S-1 filing process allows the regulator as much time as it needs. This gives the SEC complete control, enabling it to submit change requests and conduct a comprehensive evaluation without feeling pressed for time.
While Chairman of the Supreme Education Council Gary Gensler He had previously hinted at approvals “sometime this summer”, but his comments did not offer much solace to the jittery market. The recent commotion with the S-1 models suggests that even a summer launch may be overly optimistic.
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The way forward
Recent actions by the SEC have thrown the timeline into disarray, leaving investors and issuers in limbo. While approval could still happen sometime this summer, the lack of clarity paints a picture of a bumpy ride ahead for these highly anticipated investment vehicles.
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