The US Securities and Exchange Commission (SEC) has reportedly signaled at least four spot Ethereum ETF issuers to submit paperwork for potential approval.
According to sources, three of the issuers were signaled by the institution that trading could begin as early as July 23.
This green light is expected to follow issuers filing S-1 registration statements, which they can begin filing this week. In May, the SEC marked another milestone for the crypto industry by approving exchanges' proposal to list products. However, separate approval is needed before launch.
These funds, which will directly hold Ethereum, the second-largest cryptocurrency after Bitcoin, could see inflows of $4.7 billion to $5.4 billion within six months following their debut, according to a recent report from Citigroup. However, the bank's researchers also suggest that flows may have been lower due to the launch of Bitcoin ETFs earlier this year because investors seeking crypto exposure may have already invested when these funds hit the market.
To win SEC approval, asset managers are making compromises, particularly around the process of earning rewards for maintaining the blockchain, called staking. For example, Fidelity has stated that it will exclude from staking the Ethereum it purchased as part of the ETF.
Staking is a very important issue for Ethereum because it raises questions about whether the token should be considered a security. Last year, the SEC accused Coinbase of violating its rules by offering staking services in a lawsuit.
Bitcoin soared following the launch of US ETFs in January, reaching a record high of almost $74,000 before paring its gains.
*This is not investment advice.