Grayscale’s Strategic Move
The world’s largest cryptocurrency asset manager, Grayscale Investments, made headlines as it withdrew its application for an Ether futures exchange-traded fund (ETF). The sudden decision, just three weeks before the US Securities and Exchange Commission (SEC) was set to rule on several spot ETH ETFs, left analysts puzzled.
The application, initially filed in September 2023, proposed an ETF that would track Ether futures contracts on the Chicago Mercantile Exchange (CME) and potentially be listed on the New York Stock Exchange. Bloomberg ETF analyst James Seyffart speculated that Grayscale might have been leveraging the futures ETF as a strategic tool, aiming to influence the SEC’s decision on a spot Ether ETF.
James Seyffart believed the futures ETF could act as a “Trojan horse,” pressuring the SEC to approve a product that directly tracks the price of Ethereum itself.
Market Uncertainty
The withdrawal by Grayscale came amidst a crucial period for Ether ETF applications, with looming decisions on other spot Ether ETF proposals from companies like VanEck, ARK 21Shares, and Hashdex. The broader market sentiment echoed Seyffart’s confusion, especially given the upcoming rulings.
While the SEC’s stance on spot Ether ETFs remains ambiguous, there is anticipation and speculation among industry experts about the fate of these applications. The recent delay in the decision on the Invesco Galaxy spot Ethereum ETF has added to the uncertainty around the approval timelines.
Gary Gensler, the SEC Chair, addressed the pending applications without providing a clear timeline for decision-making, stating, “Those filings will be taken up at the appropriate time.”
Analysts are closely watching the developments, with mixed views on the approval prospects of the current round of Ethereum ETF applications. Bloomberg’s James Seyffart has indicated skepticism, hinting that the applications might face potential denial by the SEC.
