Ethereum ETFs to Drive $15B into Market by 2025, SEC Chair Gensler Reports Smooth Progress

On Tuesday, U.S. SEC Chair Gary Gensler shared an optimistic update on the progress of Ethereum ETF applications, emphasizing that the final approval depends on asset managers fully disclosing necessary information for their registration statements.

Speaking at the Bloomberg Invest Summit, Gensler commented, "I don’t know the timing, but it’s going smoothly," when questioned about the potential launch of an Ethereum ETF soon. He clarified, "It’s really about the asset managers making full disclosure so that those registration statements can go effective."

Gensler noted that Ethereum futures ETFs are already available, having been introduced last year. However, the prospect of a spot Ethereum ETF has generated considerable excitement within the crypto community and financial markets.

Addressing the political discussions surrounding cryptocurrency, particularly remarks by former President Donald Trump, Gensler reaffirmed his role as a securities regulator focused on protecting investors and ensuring market integrity. He stated, "I don’t speak about elections," emphasizing that his main responsibility is to oversee capital markets and safeguard investors. "We are here to look out for investors, look out for issuers, and, where appropriate, to be a cop on the beat," he added.

Former President Trump has been a vocal supporter of cryptocurrency, pledging to advocate for Bitcoin mining and accept campaign contributions in crypto. Recently, he criticized President Joe Biden’s policies on digital assets, promising to end what he called Biden’s "crusade to crush crypto."

In market news, Ethereum (ETH) saw an increase of more than 3% on Tuesday amid predictions of significant inflows into ETH ETFs. Bitwise and VanEck have submitted drafts for ETFs that could start trading immediately upon SEC approval. Bitwise CIO Matt Hougan predicted that spot Ethereum ETFs might attract net inflows of $15 billion in their first 18 months. This estimate takes into account Ethereum's market cap, the conversion of Grayscale's Ethereum Trust, the global crypto ETP market, and Bitcoin's "carry trade."

The SEC approved issuers' 19b-4 filings on May 23, but their S-1 registration statements still require approval before the ETFs can commence trading. Hougan anticipates that capital allocation to Bitcoin and Ethereum ETFs might align with their combined market caps.

Currently, Bitcoin ETFs hold approximately $56 billion in assets under management (AUM), a figure expected to rise to $100 billion by the end of 2025. Based on this projection, ETH ETFs could see net inflows of $15 billion by 2025.

VanEck also filed a Form 8-A with the SEC for its spot ETH ETF on Monday, indicating readiness to trade upon SEC approval. Bloomberg analyst Eric Balchunas remarked, "Good sign for our July 2 over/under (7 days from now). But again, anything is possible. We’ll hear more soon."

Ethereum's market dynamics indicate a bullish trend. ETH is trading around $3,391 following a slight market recovery. Data shows a Taker Buy Sell Ratio of 1.012, indicating a shift towards bullish sentiment. Analysts note potential resistance at $3,685, with crucial support at $3,203 in the event of a decline.

Meanwhile, the supply of new Ether (ETH) has been experiencing its longest inflationary period since the Merge in 2022, influenced by the Dencun upgrade in March. This upgrade introduced nine Ethereum Improvement Proposals (EIPs), including EIP-4844, which allows transaction data to be stored separately and temporarily, reducing fees on Ethereum layer 2 networks. Despite this inflation, the total supply of ETH has decreased significantly since the Merge, with more than 1.5 million ETH burned and 1.36 million ETH added, resulting in a net reduction of 345,000 ETH.

In summary, the advancements in Ethereum ETF filings and market responses reflect a dynamic and evolving landscape. With regulatory decisions pending and market sentiment showing signs of a bullish trend, the potential launch of spot Ethereum ETFs is set to have a major impact on the crypto market.