SEC Gives Ethereum ETF Applicants a Friday Ultimatum: Revise or Risk Rejection

• The SEC has asked ETH ETF issuers to bring their S-1 filings by Friday.
• JPMorgan analysts said that spot ETH ETFs will not see significant inflows.
• After the removal of staking, ETH ETFs are not attractive anymore, said JPMorgan.

The United States Securities and Exchange Commission (SEC) has requested all firms that have filed for spot Ethereum (ETH) exchange-traded funds (ETFs) to submit their amended S-1 filings by Friday.

This request comes after the regulator unexpectedly approved the spot ETH ETF 19b-4 filings on May 23 from VanEck, BlackRock, Grayscale, and other applicants. However, the firms’ initial S-1 filings were not aligned with the SEC’s expectations, causing a last-minute scramble to adjust the applications.

Despite this setback, the application process is moving forward. The asset management firms have been instructed to resubmit their S-1 filings by Friday, after which the regulator will issue its first round of comments, prompting further amendments.

Meanwhile, a team of analysts at JPMorgan led by Nikolaos Panigirtzoglou published a report predicting that “the initial market reaction to the launch of spot ethereum ETFs is likely to be negative.”

The 25-page “Flows & Liquidity” report, also read that the spot ETH ETFs will only see a fraction of the demand that was witnessed in spot Bitcoin (BTC) ETFs, where BlackRock and Fidelity made history by accruing $10 billion in Assets Under Management (AUM) in just a few weeks.

The JPMorgan analysts attribute Bitcoin’s success to its first-mover advantage, which allowed it to capture the initial demand for crypto products. They also note that the halving event in April “acted as an additional demand catalyst for spot Bitcoin ETFs.” Additionally, ETF issuers have removed staking from their filings, potentially making them less appealing to investors.