Synopsis: Grayscale withdrew their Ether futures ETF application, confusing analysts about their strategy for crypto ETFs in the United States. The SEC, wary about issuing crypto ETFs, will decide on more spot Ether ETF applications by the end of May. This ruling may indicate a shift in restrictions for cryptocurrency ETFs.
Grayscale Investments, a prominent digital currency asset management firm, withdrew its application for an Ether futures ETF to the SEC (Security Exchange Funds), causing speculation about the company’s strategy and the potential of cryptocurrency ETFs in the US.
Grayscale initially filed the application in September 2023, aiming to list the Ether Futures ETF on the New York Stock Exchange. The action was considered as part of Grayscale’s bigger drive to seek regulatory clearance for cryptocurrency ETFs.
The SEC has typically been cautious about issuing cryptocurrency ETFs, citing worries about market manipulation and the actual asset custody. However, as cryptocurrencies gain popularity, investors and the sector have put increasing pressure on the regulatory body to change its position.
Ether Futures ETF Effect: Will SEC Approve Spot Ether ETFs?
It’s unclear if the SEC will finally authorize spot Ether ETFs. An additional layer of complexity has been added with Grayscale’s recent withdrawal of its Ether Futures ETF application. Some see it as a negative sign, implying that the SEC may be even less inclined to approve spot ETFs than futures contracts due to possible regulatory supervision concerns.
Many Crypto experts also view it as a calculated effort by Grayscale to resolve the SEC’s concerns about futures ETFs and remove Ether Futures ETF to pave the way for spot ETFs. A key signal will be implicated by the SEC’s determination to approve the remaining spot Ether ETF applications by the end of May.
Rejections could result in legal disputes or force the industry to wait for more regulatory clarity, but approval would indicate a possible change in the regulatory posture.
Spot Ethereum ETF: The Next Priority?
Michael Sonnenshien, CEO of Grayscale made the following remark regarding the cancellation of the Ethereum futures ETF application:
Grayscale, CEOWe at Grayscale have made the decision to concentrate our efforts on our spot products. Our efforts on the Spot Ethereum ETF will not stop.
Since there are already a lot of Ethereum futures ETFs available, we decided not to pursue our application for an ETH futures ETF. The vast majority of the ETH Futures ETF market is dominated by these products. It’s not always the case that a product that is applied for will go on sale. When called for, retreating is essential
The statement reflects the inclination to push Spot Ethereum ETF by the CEO despite the SEC delaying to do so.
Investors should do their own research before making any investments in Spot Ethereum ETF. The cryptocurrency market is unpredictable, and it is better to seek financial advise before investing.
Also Read: South Korea’s New Government Push for Bitcoin ETF Spot
