Gensler announced the approval of spot Ethereum ETFs after the SEC approved 19b-4 applications from several exchanges in May to list the products. All that remains is regulatory approval of individual issuer applications, after which a spot Ethereum ETF can be launched in the US.
"The individual issuers are still working on the registration process. It's going smoothly," Gensler said at a Senate hearing on Thursday. "I think sometime this summer they will be approved."
Gensler pointed out that Ethereum futures ETFs were already launched last summer, and CME Ether futures have been around for years.
Although demand for these futures ETFs has been very low, many analysts, including K33 Research, expect the spot products to absorb up to $4 billion in their first five months, representing 20% to 30% of the flows to their Bitcoin-based counterparts.
The chairman's projected timeline mirrors that of ETF experts at Bloomberg, who said it would likely take weeks to months for S-1 documents to be approved following 19b-4 approvals. In any case, the arrival of such funds in the US is a matter of when, not if.
Despite his confirmation, Gensler has yet to directly answer the question of whether Ethereum is classified as a security or commodity when asked directly. Legal experts argue that Ethereum has already been implicitly classified as a commodity by being approved as a single-asset ETF product.
The President also expressed concern about a stipulation recently included in the FY2025 funding bill by the House Appropriations Committee. The stipulation requires that "none of the funds made available...may be used to conduct any law enforcement action related to a digital asset transaction," except in the case of fraud or market manipulation.
"This would seriously undermine our efforts," said Gensler. "While not all cryptos are crypto-currencies... those that are have an obligation to disclose full, fair and transparent information to the public. We would lose that."
