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Grayscale Ethereum Trust has completed registration with the SEC, causing ETH price to surge over 7% at one point.

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Grayscale Ethereum Trust has completed registration with the SEC, causing ETH price to surge over 7% at one point.

Grayscale Investments' Ethereum Trust Fund (ETHE) has now officially registered with the U.S. Securities and Exchange Commission (SEC). The price of Ethereum surged over 7% after the announcement.

ETHE Completes Registration with SEC

The Ethereum Trust Fund (ETHE) operated by Grayscale Investments, a digital asset management firm based in the United States, has officially completed registration with the U.S. Securities and Exchange Commission (SEC). The company is now obligated to submit quarterly and annual reports on ETHE to the SEC. This marks the first Ethereum securities investment tool targeted at traditional investors that is required to report to the SEC. Grayscale had submitted ETHE's registration application to the SEC in August this year under the 1934 Securities Act. The trust fund is currently valued at around $800 million with an average daily trading volume of approximately 137,000 shares.

ETHE is not the first cryptocurrency investment product to register with the SEC. According to reports, Grayscale had submitted a registration application for the Bitcoin Trust Fund (GBTC) to the SEC in November last year, which became effective in January this year, making it the first cryptocurrency investment tool that requires reporting to the SEC. In fact, trust funds including GBTC and ETHE are eligible for SEC registration exemptions and can be traded on the OTC market. Grayscale stated that voluntary registration with the SEC does not mean the product is an ETF, and its trust structure will not change, nor will it be traded on a national securities exchange.

Another advantage of Grayscale's registration is that after the company becomes a reporting company for 90 days and meets the requirements of Section 144 of the Securities Act, the holding period for private shares can be reduced from one year to 6 months.

Since the announcement, the price of Ethereum (ETH) has surged over 7%.

Uncertainty Surrounding Ethereum 2.0

As required, Grayscale is obligated to disclose risk factors affecting the product's value in the document submitted to the SEC. In the document, Grayscale points out that Ethereum (ETH) is transitioning to a proof-of-stake consensus mechanism, which could potentially pose a risk to the product's price.

"The consensus mechanism of a digital asset network is a critical part of its source code, and any failure to correctly implement such changes could have a significant and adverse impact on the value of ETH and the shares of ETHE."

However, the uncertainty surrounding Ethereum 2.0 has not diminished investors' interest in the fund. The assets managed by the trust fund have grown exponentially over the past year, increasing from $67 million at issuance to over $800 million, with holdings growing more than tenfold.