Ethereum ETF Issuers Must Submit Draft S-1 Forms Today

According to sources familiar with the matter, the SEC has instructed potential issuers to file amended S-1 forms by Friday, May 31.

This follows the approval of 19b-4 forms on May 23, marking a major milestone in the process.

Progress on approval of the Ethereum Spot ETF

The recent approval of Forms 19b-4 represents a major milestone, made possible by a last-minute change of direction from the SEC. Therefore, issuers have not prepared their S-1 forms in advance. Progress is being made, though, as the SEC is now actively working with issuers to finalize these forms.

Sources familiar with the situation reportedly confirmed that the SEC has requested draft S-1 filings by Friday. Following this submission, the agency will submit its first round of comments, leading to further amendments. Launching an ETF requires SEC approval of Forms 19b-4 and S-1, which typically undergo several revisions before final approval.

Until now, VanEck has filed an amended Form S-1 on the day the ETFs are approved. BlackRock followed suit on May 30, detailing a $10 million seed investment for its ETF.

While the details of the initial investments are relatively straightforward, other aspects of the models may require more time to address. S-1 forms are expected to undergo at least two more rounds of draft filing before they are finalized.

Mixed feelings about the delay

Eric Balchunas previously noted that the finalization of the S-1 registration data may take additional time, which could delay the launch of Ethereum ETFs. “I don't know how fast the fast track will be, but it's probably going to be a crazy scramble over the next couple of days, maybe even the next weeks, depending on the S-1,” he noted.

Despite the potential delay, JPMorgan analysts remain optimistic, anticipating spot trading for Ether ETFs to begin before November. They view ETF approval and the broader cryptocurrency landscape as increasingly political ahead of the 2024 US presidential election.

JPM: “The issuers' registration statements are still under review by the SEC. As such, there is no expected date for these ETFs to begin trading.
We note that Galaxy analysts expect that the S-1s will be completed and may begin trading in July or August 2024. We note this…

– Matthew Siegel, Recovering CFA (@matthew_sigel) May 24, 2024

Zuhair Ebtekar, co-founder of Split Capital, noted that the unexpected approval surprised many, and the immediate launch could have led to further volatility in price movement. He noted that the delay allows traders to anticipate and prepare for potential inflows.

GSR Research Analyst Brian Ruddick added that the delay, while not having a major impact, is a marginal positive that could attract early inflows and benefit the ETH price.