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Grayscale withdraws ETF application ahead of SEC decision

This decision may be based on the expectation of a more favorable regulatory environment or the need for further compliance with SEC requirements.

Date: 2024-05-08 Author: Łukasz Michałek
Grayscale withdraws ETF application ahead of SEC decision

The world’s largest cryptocurrency asset manager Grayscale Investments withdrew its application to create an Ether futures exchange-traded fund (ETF) just three weeks before the US Securities and Exchange Commission (SEC) ruled on several ETH ETFs.

The Grayscale Ethereum Futures Trust ‘s notice of withdrawal was filed on May 7, leaving analysts struggling to understand the sudden change. The September 2023 application proposed an ETF that would track Ether futures on the Chicago Mercantile Exchange (CME). If approved, it would be listed on the New York Stock Exchange.

Bloomberg ETF analyst James Seyffart had previously speculated that Grayscale could use ETF futures as a strategic tool. He believed it could act as a “Trojan horse,” putting pressure on the SEC to approve the ETF, a product that directly tracks the price of Ethereum itself.

But Seyffart’s confusion reflected broader market sentiment. The withdrawal comes just weeks before the SEC’s deadlines for ruling on several Ether ETF applications from other companies, including VanEck (May 23), ARK 21Shares (May 24) and Hashdex (May 30).

Earlier this week, the SEC announced a delay in its decision on the Invesco Galaxy Ethereum ETF, setting another deadline of July 5, 2024.

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Analysts are not hopeful about ETH ETF approval

The SEC’s position on Ether ETFs remains unclear. In a recent interview with CNBC, SEC Chairman Gary Gensler acknowledged the proposals, but gave no specific timetable for a decision. “It’s something that’s facing our Commission right now,” he said. “We are a five-member Commission and these filings will be considered in due course.”

While applications from Invesco Galaxy, BlackRock and Fidelity are still expected in the coming months, industry experts expect a similar omnibus decision-making process from the SEC, mirroring its approach for Bitcoin ETFs in January 2023.

Bloomberg analyst James Seyffart expressed skepticism, suggesting that the current round of Ethereum ETF applications may ultimately be rejected.

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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