Grayscale Investments, the largest cryptocurrency asset manager in the world, has decided to withdraw its application for an Ether futures exchange-traded fund (ETF) just weeks before the US Securities and Exchange Commission (SEC) was scheduled to make a ruling on several spot ETH ETFs.
The notice of withdrawal for the Grayscale Ethereum Futures Trust was submitted on May 7th, catching analysts off guard. The application, which was filed in September 2023, proposed an ETF that would track Ether futures contracts on the Chicago Mercantile Exchange (CME). If approved, it would have been listed on the New York Stock Exchange.
There have been speculations that Grayscale could be using the futures ETF as a strategic tool to pressure the SEC into approving a spot Ether ETF, which directly follows the price of Ethereum itself. However, analysts are puzzled by this move, especially since the SEC is expected to rule on spot Ether ETF applications from other companies, such as VanEck, ARK 21Shares, and Hashdex, in the coming weeks.
The SEC’s stance on spot Ether ETFs remains uncertain. In a recent interview, SEC Chair Gary Gensler acknowledged the applications but did not provide a specific timeline for a decision. Grayscale’s withdrawal has left the fate of spot Ethereum ETFs hanging in the balance. While applications from Invesco Galaxy, BlackRock, and Fidelity are still anticipated, industry experts believe the SEC will likely approach these applications in a similar manner to its approach with spot Bitcoin ETFs in January 2023.
Bloomberg analyst James Seyffart has expressed doubt and suggested that the current round of Ethereum ETF applications may ultimately be denied.
