Grayscale's surprising announcement to withdraw its application for an Ethereum (ETH) ETF ahead of a decision from the U.S. Securities and Exchange Commission (SEC) has the cryptocurrency community abuzz.
Grayscale strategic withdrawal?
The proposal submitted by Grayscale on September 19, 2023, originally aimed to list the Grayscale Ethereum Futures Trust on the New York Stock Exchange. However, on May 7, the crypto asset manager chose to withdraw its application, a decision that surprised many. Bloomberg ETF analyst James Seyffart, who had previously speculated that Grayscale might use futures ETFs as strategic leverage to push for approval of its ETH spot ETF, expressed confusion about the timing of the withdrawal.
UPDATE This is interesting. @Grayscale just withdrew their 19b-4 filing for an#Ethereumfutures ETF. This was essentially a trojan horse filing in my view, in order to create the same circumstances that allowed Grayscale to win the $GBTC lawsuit (approve futures deny spot) pic.twitter.com/Kihj2dlQx1
— James Seyffart (@JSeyff) May 7, 2024
SEC's upcoming decision raises eyebrows
The SEC is currently facing a series of critical deadlines. Notably, the committee has until May 23 to decide on VanEck’s spot ETH ETF application, followed by deadlines for ARK 21Shares and Hashdex on May 24 and May 30, respectively. Applications from prominent companies such as Invesco Galaxy, BlackRock and Fidelity are also scheduled for decisions during the summer months of June, July and August.
Market analysts express their views
Bloomberg ETF analysts James Seyffart and colleague Eric Balchunas initially gave a spot Ether ETF a 70% chance of approval in January, but that number has since dropped to 25%.
This decline in confidence represents growing uncertainty about the SEC’s stance on cryptocurrency-related products. In an interview with CNBC on May 7, SEC Chairman Gary Gensler highlighted the ongoing discussions within the commission, saying: "This is an issue currently facing our commission, we are a five-person commission, and these applications will be processed in due course." .
The cryptocurrency market is watching these developments closely, as the SEC’s decision could have a significant impact on the adoption and integration of cryptocurrencies into mainstream financial products. As industry experts speculate on whether the SEC will handle these applications as it has previously done with spot Bitcoin ETFs, the community has not given up hope.
This article Grayscale abandons the Ethereum futures ETF plan, and the SEC decides to withdraw from the market on the eve of the decision. It first appeared on Chain News ABMedia.