- Grayscale makes a U-turn on ETH futures ETF application
Analysts offer divergent views on Grayscale’s move and SEC’s next play.
As an experienced analyst, I believe that Grayscale’s withdrawal of its Ethereum futures ETF application adds another layer of uncertainty to the already complicated regulatory landscape surrounding Ethereum-backed Exchange Traded Funds (ETFs) in the US.
Grayscale has abandoned its application for an Ethereum (ETH) futures-based exchange-traded fund (ETF) with the Securities and Exchange Commission (SEC). This decision has left analysts pondering over the potential implications for the SEC’s future handling of similar ETF proposals.
James Seyffart from Bloomberg’s ETF team referred to the proposed Ether (ETH) exchange-traded fund (ETF) application as a “stealth move” or “hidden strategy” that Cboe Global Markets could employ if the Securities and Exchange Commission (SEC) rejects their spot ETH ETF proposal, similar to what happened with their Bitcoin [BTC] application.
Now that Grayscale has withdrawn the filing, the analyst noted,
As a crypto investor, I might ponder over the possibility that the SEC held discussions with Grayscale. Whatever transpired during those talks could have been persuasive enough for Grayscale to decide to withdraw. (Just speculating here)
No clear read on SEC’s Ethereum ETF approval move
Bloomberg ETF analysts have long maintained low odds of May approvals for the spot ETH ETFs in May.
It appears that the market is highly skeptical of any positive developments taking place in May based on data from prediction platforms like Polymarket, with May approval bets dipping below the 10% threshold.
Another Bloomberg analyst, Eric Balchunas, commented that,
“Sounds like saying this is a good sign they’re not gonna pursue a lawsuit this time around?”
When queried about the possible implications of Grayscale’s withdrawn application for a May approval, Seyffart expressed ambiguity and responded.
“I strongly doubt that will occur, although there’s still a small chance. Consequently, I believe something else happened. However, if I were in Grayscale’s position, those would be among the rare instances where I’d consider retracting my stance.”
Nate Geraci of ETF Store also couldn’t read Grayscale’s move. However, he pointed out that,
“I would consider taking this action only if I were in Grayscale’s position, due to my belief that the Ethereum ETF will eventually gain approval.”
As a researcher looking into recent developments in the cryptocurrency market, I’ve come across an intriguing observation made by Eleanor Terrett, a market watcher and journalist at FOX Business. She pointed out that the subdued interest in Ethereum futures could potentially explain Grayscale’s decision to convert its Ethereum Trust into a Decentralized Finance (DeFi) product. This paraphrased version keeps the focus on my role as a researcher and presents Eleanor Terrett’s perspective in a clear and natural way.
There are a handful of ETH futures ETFs in the US per Blockworks ETF tracker.
However, Terret noted that other Ethereum futures ETFs were approved in different frameworks,
“The others were approved under the 40 Act, not the 33 Act?”
From a different viewpoint, the United States has two distinct regulatory frameworks for Exchange-Traded Funds (ETFs) – the Investment Company Act of 1940 (1940 Act) and the Securities Act of 1933 (1933 Act).
As an analyst, I’ve closely followed the latest interview given by Gary Gensler, the chairman of the Securities and Exchange Commission (SEC). During the Q&A session, he was confronted with queries regarding the current standing and potential outcome of the spot Ethereum Exchange-Traded Fund (ETF) filings. Instead of providing clear-cut responses, Mr. Gensler employed ambiguous language, leaving the audience with more questions than answers.
During this interval, ETH‘s price fluctuated between $2900 and $3300. This range has held steady for ETH since mid-April.
Despite the significant influx of over $30 million last week, we haven’t seen a breakout in Ethereum’s price range yet. Nevertheless, this situation might alter following the Securities and Exchange Commission (SEC) decision on Ethereum-based spot ETF applications, which is expected in late May.
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2024-05-08 23:04