Grayscale abandons Ethereum futures ETF plan, exits on the eve of SEC decision.
As the U.S. Securities and Exchange Commission (SEC) is about to make a decision, Grayscale surprisingly announced the withdrawal of its Ethereum (ETH) ETF application, sparking discussions within the cryptocurrency community.
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Grayscale Strategic Withdrawal?
Grayscale's proposal submitted on September 19, 2023, aimed to list the Grayscale Ethereum Futures Trust on the New York Stock Exchange. However, on May 7, this cryptocurrency asset management company chose to withdraw the application, a decision that caught many by surprise. Bloomberg ETF analyst James Seyffart, who had previously speculated that Grayscale might use a futures ETF as leverage to push through its ETH spot ETF approval, expressed confusion at the timing of the withdrawal.
UPDATE This is interesting. @Grayscale just withdrew their 19b-4 filing for an #Ethereum futures ETF. This was essentially a trojan horse filing in my view, in order to create the same circumstances that allowed Grayscale to win the $GBTC lawsuit (approve futures deny spot) pic.twitter.com/Kihj2dlQx1
— James Seyffart (@JSeyff) May 7, 2024
SEC Decision Looms Large
The SEC is currently facing a series of critical deadlines. Of note, the commission must decide on VanEck's spot ETH ETF application by May 23, followed by ARK 21Shares and Hashdex with deadlines on May 24 and May 30, respectively. Applications from prominent companies like Invesco Galaxy, BlackRock, and Fidelity are also slated for decisions in the summer months of June, July, and August.
Market Analysts Weigh In
Bloomberg ETF analyst James Seyffart and his colleague Eric Balchunas initially gave a 70% chance of approval for a spot Ether ETF in January, but that number has since dropped to 25%.
This declining confidence reflects increasing uncertainty from the SEC regarding cryptocurrency-related products. In an interview with CNBC on May 7, SEC Chairman Gary Gensler emphasized ongoing discussions within the commission, stating, "This is the issue we are facing as a commission, we are a five-person commission, and these applications will be dealt with in due course."
The cryptocurrency market is closely monitoring these developments, as the SEC's decisions could have significant implications for the adoption and integration of cryptocurrencies into mainstream financial products. While industry experts speculate on how the SEC will handle these applications, the community continues to hold onto hope based on past handling of spot Bitcoin ETFs.