Grayscale Takes Another Swing At Ethereum ETF Approval

Grayscale, a major digital asset manager, has strengthened its bid to convert Ethereum Trust into a spot exchange-traded fund (ETF). On March 15, the company amended its regulatory filing, bolstering its case with fresh evidence and analysis.

A key addition is a correlation analysis conducted by Coinbase, a leading cryptocurrency exchange. Coinbase found that the CME’s Ethereum futures market has been highly correlated with the spot Ethereum market for roughly the past three years. Notably, this correlation rate exceeds the SEC deemed sufficient between the CME Bitcoin futures and spot Bitcoin markets.

The amended filing also addresses concerns about market surveillance and potential fraud. It argues that surveillance sharing within the CME Ethereum market is robust enough to safeguard against manipulation in the underlying spot market.

Grayscale has also expanded on the mechanics of creating and redeeming ETF shares. Notably, the filing states that authorized participants can only handle cash creations and redemptions, not Ethereum.

The update reveals that Grayscale’s Ethereum Trust now holds $11.8 billion in assets under management, significantly higher than the previously reported $4.8 billion. If converted to an ETF, this could unlock over $1.73 billion in value for investors, up from the earlier $1.6 billion estimate.

With this strengthened filing, Grayscale is making another push to gain regulatory approval for its long-awaited Ethereum spot ETF. The SEC’s decision on this product could have far-reaching implications for the crypto industry.

Grayscale Pushes For Ethereum ETF Approval

Craig Salm, Grayscale’s Chief Legal Officer, confirmed the company’s latest filing to gain approval for a spot in Ethereum ETF. In a post on X (formerly Twitter), Salm underscored the expected high demand for such an investment product, stating, “Investors want and deserve access to Ethereum in the form of a spot Ethereum ETF.”

Salm drew parallels between the case for an Ethereum ETF and the recently approved spot Bitcoin ETFs. He asserted, “The case for an Ethereum ETF is just as strong as it was for spot Bitcoin ETFs.”

Addressing previous regulatory concerns surrounding market manipulation and creation/redemption methods was crucial before spot Bitcoin ETFs received the green light in January. Grayscale’s latest amendment tackles these issues specific to Ethereum ETFs, which is a vital step in the approval process.

However, the odds of an Ethereum ETF gaining approval by the end of May currently stand at just 26%, according to predictions on Polymarket as of March 15. This figure reflects declining expectations of regulatory approval in the near term.

As the battle for an Ethereum ETF continues, Grayscale remains committed to providing investors access to this prominent cryptocurrency through a regulated investment vehicle.

Related Reading | South Africa FSCA Grants Licenses To 60 Crypto Firms

Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.

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