Grayscale, a crypto asset manager, is one of the candidates considering launching a spot exchange-traded Fund (ETF) for Ethereum (ETH). Last week, Grayscale discussed its application with the US Securities and Exchange Commission (SEC) for the first time. This has increased optimism about quick approval; however, according to well-known analyst, Eric Balchunas, it is still far away.
Last Wednesday, the SEC held a meeting with Grayscale and Coinbase, the American Cryptocurrency Exchange, which will act as custodian if permitted. This is the regulator’s first engagement with a potential Ethereum spot ETF proponent targeting the US market.
Grayscale and Coinbase are trying to solve the SEC’s concerns about the safety of an Ethereum exchange fund. During the meeting, Coinbase gave a presentation that has been posted on the regulator’s website. In October last year, Grayscale applied with the financial watchdog to convert its Ethereum trust fund into an Ethereum spot ETF.
SEC Delays Ethereum ETF Assessment
Grayscale is not the only one trying to launch a spot Ethereum ETF; BlackRock, Fidelity, Hashdex, Invesco & Galaxy Digital, and ARK Invest & 21Shares are also trying to do so. The SEC asked to postpone the assessment procedure for both BlackRock and Fidelity applications earlier this week.
The conversations between the SEC and asset managers during the last Bitcoin ETF battle were positive. In one of his posts on the social media platform X, Bloomberg ETF analyst Eric Balchunas admits this is a promising sign but lists some reasons he is not overly confident about a quick approval.
Normally I’d say this was good sign but as far as I know the Staff has not given any comments yet to the issuers, which is not a good sign as we past when they gave comments on btc ETFs, said Balchunas.
In addition, Balchunas emphasizes that, unlike Bitcoin, no legal battle has been won. Finally, he believes that the correlation between ethereum futures, of which spot ETFs are already alive, and spot is not as strong as it is with Bitcoin. In any case, the SEC will have to make the final decision on the applications of VanEck and ARK Invest & 21Shares in May.
Furthermore, Balchunas insists that Bitcoin has no legal victory in its name. As soon as we reach the end, the correlation between Ethereum futures and spot ETFs that already exist superimposed with the latter is not very strong, like Bitcoin. At least, it would be up to the SEC to decide what will happen with regard to VanEck’s and ARK Invest & 21Shares applications in May.
The journey towards an Ethereum ETF is fraught with uncertainties, but it also embodies the innovative spirit of the cryptocurrency sector. As experts weigh in and the SEC deliberates, the outcome of this endeavor could herald a new era for Ethereum and its investors.
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