- Grayscale has filed a revised application to convert the Grayscale Ethereum Trust (ETHE) into a spot Ethereum ETF.
- Industry experts have seen this as a potential turning point for cryptocurrency ETF regulations.
- Analysts believe the SEC may have become more likely to approve Ethereum spot ETFs to avoid another legal battle.
In a move to expand investor access to Ethereum, Grayscale Investments, the world’s largest cryptocurrency asset manager, has filed a revised application with the U.S. Securities and Exchange Commission (SEC) seeking to convert its Grayscale Ethereum Trust (ETHE) into a tradable security on the New York Stock Exchange Arca.
Grayscale’s Spot Ether ETF Filing a Game Changer?
This revised filing, announced by Grayscale’s Chief Legal Officer Craig Salm, comes amidst ongoing efforts by the firm to offer investors regulated avenues for exposure to cryptocurrencies. The application specifically targets creating a spot Ethereum ETF, mirroring the structure of recently approved Bitcoin spot ETFs.
“Investors want and deserve access to Ethereum as a spot Ethereum ETF,” Salm stated, reflecting Grayscale’s belief that a similar demand exists for Ethereum as witnessed with Bitcoin.
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Industry experts like Nate Geraci, President of ETFStore, see this move as a potential turning point for the regulatory landscape surrounding cryptocurrency ETFs. “This filing demonstrates that companies are persistent in their pursuit of spot Ethereum ETFs,” Geraci commented.
He further suggested that Grayscale’s application might pave the way for an alternative regulatory pathway similar to the one established for Bitcoin spot ETFs. A legal battle preceded the approval of Bitcoin spot ETFs.
Will Ethereum ETFs Get the Green Light?
Grayscale initially sought to convert its flagship Bitcoin product, the Grayscale Bitcoin Trust (GBTC), into an ETF, but faced rejection from the SEC. The eventual approval of Bitcoin spot ETFs came via a different structure, highlighting the evolving regulatory environment for cryptocurrency products.
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Analysts now suggest that the SEC might be more inclined to approve Ethereum spot ETFs to avoid a similar legal showdown. However, they also caution that the chances of approval in May, a previously anticipated timeframe, have diminished.
With this revised application, Grayscale has reignited the conversation surrounding Ethereum ETFs, and the industry awaits the SEC’s next move in determining the future of this investment vehicle.
On the Flipside
- The filing faces competition from other potential Ethereum ETF applicants, which could delay approval.
- The SEC’s stance on Ethereum ETFs remains unclear, and approval is not guaranteed.
- Unlike a directly traded Ethereum token, ETHE shares cannot be used for applications like staking or DeFi.
Why This Matters
Grayscale’s revised application, mirroring the structure of successful Bitcoin ETFs, could establish a new pathway for Ethereum ETFs and potentially expedite regulatory approval, marking a significant step towards wider institutional adoption of Ethereum and increased accessibility for investors.
To learn more about Grayscale’s plan to create a new Bitcoin product, Grayscale Bitcoin Mini Trust, read here:
Grayscale Eyes ‘mini’ GBTC Spinoff as Outflows Top $11.05B
To learn more about the meeting between Coinbase, Grayscale and the SEC to discuss a spot ether ETF, read here:
