- Grayscale has met with the SEC to discuss approval of its proposed spot ether ETF.
- Analysts have expressed mixed reactions, with some cautioning against over-optimism due to lack of feedback.
- This development follows delays in decisions on other ether ETF applications already filed.
In a move that could signal progress for cryptocurrency exchange-traded funds (ETFs), Coinbase met with officials at the Securities and Exchange Commission (SEC) to discuss Grayscale’s proposal for an ether ETF.
Coinbase Backs Grayscale’s Ethereum ETF
Representatives from both companies and the SEC’s Division of Trading and Markets attended the meeting, which focused on Grayscale’s bid to convert its existing Ethereum Trust into a spot ETF.
Coinbase presented its arguments to the SEC, emphasizing that ether shares in the proposed ETF should be categorized as commodities, similar to existing Bitcoin ETFs. The presentation also addressed concerns about potential fraud and manipulation in the ether market.
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Coinbase highlighted the resilience of spot markets and their plan to implement a surveillance-sharing agreement with the Chicago Mercantile Exchange (CME) to bolster security further.
Analysts expressed mixed reactions to the meeting. While some viewed it as a positive step, others cautioned against over-optimism. Eric Balchunas, a senior ETF analyst at Bloomberg, noted the lack of immediate feedback from the SEC, which he considers a potential hurdle compared to the approval process for Bitcoin ETFs.
SEC Considers First Spot Ether ETF
Bloomberg analyst James Seyffart echoed this sentiment, suggesting the delayed comments could be a negative sign. However, analysts like Nate Geraci, president of ETF Store, found encouragement in the data presented by Coinbase, which reportedly demonstrated a strong correlation between ether futures and spot markets, mirroring the situation with Bitcoin.
Geraci further questioned the grounds for the SEC to deny a spot ether ETF application potentially. The development comes after the SEC postponed decisions on spot ether ETF applications from BlackRock and Fidelity earlier this week. These delays were anticipated, with experts suggesting the SEC will deliver its final verdict on ether ETFs in May.
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The meeting between Coinbase, Grayscale, and the SEC could be a significant step towards approving the first spot ether ETF, potentially opening up wider investment opportunities for the cryptocurrency.
On the Flipside
- The SEC has not yet provided any feedback on the meeting, which could indicate they are not yet ready to approve a spot ether ETF.
- The approval process for ETFs can be lengthy and complex, and there is no guarantee that a spot ether ETF will be approved in May.
Why This Matters
This meeting signifies a potential turning point for cryptocurrency regulation. If Coinbase’s arguments for a spot ether ETF gain traction with the SEC, it could pave the way for broader acceptance of similar ETFs within the crypto market. This would unlock easier access for mainstream investors and potentially fuel further growth in cryptocurrency.
To learn more about the ongoing debate around how Ethereum should be classified by the SEC, read here:
Are Ethereum ETFs Being Hamstrung by SEC’s Securities Claim?
To learn more about the legal battle between Coinbase and the SEC, read here:
Coinbase Lambasts SEC’s Hail Mary to Sway Dismissal Decision
