MARKETREGULATION

Grayscale files three new fund applications with the SEC, including Ethereum Futures ETF, no longer focusing solely on spot-based offerings.

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Grayscale files three new fund applications with the SEC, including Ethereum Futures ETF, no longer focusing solely on spot-based offerings.

The digital currency asset management company Grayscale Investments announced the establishment of Grayscale Funds Trust, structured under a statutory trust in Delaware, enabling Grayscale to independently manage its ETF charter and agency products established under the Investment Company Act.

Simultaneously Adding Three Funds, Including Ethereum Futures ETF

Grayscale has simultaneously filed for three new funds with the SEC, expected to be listed on the New York Stock Exchange Arca, Inc.

  • Grayscale Global Bitcoin Composite ETF, BTC: Primarily invests in globally major non-U.S. listed bitcoin exchange-traded products (ETPs) and global bitcoin mining companies, most of which derive their revenue from bitcoin mining activities or mining-related hardware, software, services, and projects.

  • Grayscale Ethereum Futures ETF, ETHG: Aims to achieve its investment objective through actively managed Ethereum futures contracts. Currently, such contracts are only traded on the Chicago Mercantile Exchange (CME), with the remaining cash being invested in money market instruments.

  • Grayscale Privacy ETF, PRVC: Will invest in companies providing data security and protection, data privacy, and cybersecurity products and services.

These three new funds will be advised by Grayscale Advisors, LLC, responsible for the general management and administration of the funds. Grayscale Advisors, LLC is an investment advisor registered with the U.S. Securities and Exchange Commission.

GBTC's Transition to Bitcoin Spot ETF Unsuccessful, Ongoing Lawsuit with SEC

Last June, Grayscale's attempt to transition GBTC into a Bitcoin spot ETF was rejected. Disagreeing with the reasons provided by the U.S. Securities and Exchange Commission (SEC), Grayscale filed a lawsuit against the SEC because while multiple bitcoin futures ETFs have been approved, the SEC rejected Grayscale's application citing market manipulation and investor protection concerns.

Starting in early March, the two sides began their first arguments. Judge Neomi Rao questioned the SEC's understanding of the "relationship between spot and futures," indicating room for debate.

Bloomberg's litigation analyst Elliot Stein expects a ruling by the court possibly in the third quarter, but also noted that winning in court does not necessarily mean the ETF application will be approved.

It seems Grayscale is continuing to increase its market share by applying for new futures funds, potentially avoiding the confrontation with the SEC in their lawsuit.