The U.S. Securities and Exchange Commission (SEC) has approved Ethereum (ETH) ETFs, marking a significant milestone in the cryptocurrency market. Unlike the Bitcoin ETFs, which began trading the day after approval, Ethereum ETFs are expected to launch in a few weeks or even months.

This delay stems from the need for the ETFs to have their S-1 registration statements go effective before trading can commence, even though the SEC has already approved the 19b-4 forms. The current stage of the process requires feedback from the agency to issuers, which will determine the exact timeline. Despite the apparent anticlimax following the unexpected approval, market analysts see this as a positive development.

Zaheer Ebtikar, co-founder of Split Capital, commented on the situation, saying, "Everyone was anticipating the ETF would not get approved. Then very quickly, we went back into a market where everyone was caught offside." Ebtikar emphasized that an immediate start of trading could have led to much more volatile price action. The delay, he explained, provides market participants the opportunity to front-run potential inflows into the ETFs. Even conservative estimates of 15% of the size of Bitcoin ETF inflows would still translate to a substantial amount of value for Ethereum.

Echoing this sentiment, Simon Peters, an analyst at eToro, remarked, "With the 19b-4s out of the way, it could be an opportunity now for savvy crypto investors to buy Ethereum in anticipation of the S-1s being approved, front-running the ETFs going live and the billions of dollars potentially flowing into these." Peters noted that Bitcoin reached an all-time high after its ETFs went live, raising the question of whether Ethereum might follow a similar trajectory. Currently, Ethereum is about 35% below its all-time high.

Brian Rudick, a research analyst at GSR, also weighed in, stating, "While not too impactful, the delay is a marginal positive. The 19b-4 approvals caught most by surprise, and the delay should enable anticipation and publicity to build into the launch. All else equal, this should help early inflows into the products, which would help ETH’s price."

The unexpected approval from the SEC led to a surge in market activity. According to Ilya Paveliev, co-founder of Arete Capital, traders flocked to leverage early momentum, with open interest rising by 26%. Paveliev expects this to revert as short-term traders take profits, but believes the ETF launch will significantly boost spot volumes. He predicts initial daily net spot inflows of $20-40 million for the ETH ETF, which, combined with low exchange reserves and 30% of ETH supply locked in staking, sets the stage for a potential supply-constrained price squeeze.

While the exact timing for the S-1s to go effective remains uncertain, JPMorgan analysts anticipate that trading will start "well before November," providing a clear horizon for investors looking to capitalize on the upcoming Ethereum ETFs.