Ethereum ETF Offered by Grayscale
The U.S. Securities and Exchange Commission (SEC) has once again delayed the approval of the Grayscale Ethereum (ETH) Futures Trust exchange-traded fund (ETF). The postponement, revealed in an SEC filing on March 22, pushes the deadline from March 31 to May 30. This decision has ignited considerable interest and speculation within the cryptocurrency community as it directly impacts the status of Grayscale’s Ethereum Futures Trust ETF.
This delay unfolds amidst a regulatory environment increasingly scrutinizing crypto-based financial products, following the sanctioning of Bitcoin ETFs earlier this year. Grayscale’s Ethereum ETF application has encountered multiple delays, with the SEC requesting more time to assess the proposed rule change and address raised concerns. The original decision on the ETF’s approval/disapproval was slated for December 2023, but the SEC deferred it, citing the necessity for additional public input.
In January, the SEC prolonged its evaluation of Grayscale’s Ethereum ETF application, alongside BlackRock’s bid for an ether ETF. This move has added to the mounting uncertainties regarding the approval timeline and has triggered inquiries into the regulatory outlook for crypto-based financial products.
Coinbase urges SEC to greenlight Grayscale’s spot Ethereum ETF
Long-term Implications for Grayscale and the Crypto Sector:
Experts posit that the approval of Ethereum-based ETFs could potentially drive up Ethereum prices, positioning it as a formidable competitor to Bitcoin (BTC) within the market. As stakeholders closely observe these developments, the verdict on Grayscale’s Ethereum Futures Trust ETF stands as a focal point in the crypto investment domain, shaping the future trajectory of Ethereum and the broader cryptocurrency market.
Earlier this month, the SEC engaged with applicants for spot Ethereum ETFs to discuss proposals for Ether-linked investment vehicles. This discussion emerged amidst fervent interest in spot Ethereum ETFs post the successful introduction of spot Bitcoin products. The SEC has deferred its decisions on spot Ether-based products, with VanEck’s application leading this regulatory process. Other major issuers eagerly anticipating responses encompass BlackRock, Franklin Templeton Grayscale, and Invesco Galaxy.
The SEC’s deferral of decisions on these Ether-based products until at least May has instigated a sense of uncertainty across the industry. VanEck’s submission holds a critical stance, with the SEC confronting a May 23 deadline to either accept or reject their proposal, setting the tone for subsequent determinations on similar applications from key asset managers.
The journey towards authorizing spot Ethereum ETFs encountered hurdles as the SEC grappled with regulatory intricacies and Ethereum-specific concerns juxtaposed with Bitcoin. Jake Chervinsky, Chief Legal Officer at Variant Fund, has cast doubts on the SEC’s approval of spot Ethereum ETFs by the May deadline. Chervinsky’s reservations stem from legal intricacies and the policy climate in Washington, D.C., which he believes increase the likelihood of denial or a request for withdrawal by the SEC rather than approval.
SEC Chair Gary Gensler’s cautious stance towards cryptocurrencies introduced an extra layer of uncertainty into the approval process, underscoring the high-risk nature of crypto assets and the requisite consensus among commissioners. Despite the mounting interest and anticipation encircling spot Ethereum ETFs, regulatory hurdles and ongoing deliberations with issuers underscore the intricate dynamics shaping the future of Ether-based investment products within the market.
