Sources familiar with the matter revealed that issuers of prospective spot Ethereum ETFs are currently engaged in revising their S-1 forms, responding to comments received from the U.S. Securities and Exchange Commission (SEC) last week. The issuers face a deadline this Friday to finalize their revisions before resubmitting them to the SEC.

Although the issuers had their 19b-4 forms approved in May, signaling progress toward ETF launch, the effective commencement of trading hinges on the approval of the S-1 forms. This process involves iterative rounds of revisions and feedback exchanges with the SEC until the forms meet regulatory standards.

According to one source close to the process, the latest round of SEC comments has been deemed "reasonable," indicating optimism among issuers regarding an impending approval. Another source characterized the comments as "light," suggesting minimal hurdles in the revision process.

Eric Balchunas, a Senior ETF Analyst at Bloomberg, adjusted his estimated launch date for the Ethereum ETFs to around July 2, based on feedback and progress reports from the issuers. This adjustment reflects the ongoing regulatory dialogue and the pace of response from ETF sponsors.

The initial drafts of the S-1 forms were submitted by issuers on May 31, following the approval of their 19b-4 filings. Delays in receiving SEC comments meant that the anticipated feedback arrived two weeks later than expected, potentially affecting the overall timeline for ETF approvals.

Chair Gary Gensler of the SEC has indicated that the approval timeline for the S-1 forms is slated for "sometime this summer," emphasizing the importance of issuers promptly addressing regulatory feedback to expedite the process. The market awaits further clarity on when these Ethereum ETFs will officially launch, with expectations that they could attract a significant portion of investor flows akin to those seen by Bitcoin ETFs, potentially up to 20% according to some analysts.

As the cryptocurrency market evolves and regulatory frameworks adapt, the introduction of Ethereum ETFs represents a significant development that could further integrate digital assets into traditional investment avenues, pending regulatory approval and market acceptance.