Get ready for an exciting development, as Grayscale is taking a bold dive into the world of spot Ether (ETH) exchange-traded funds (ETFs) with high hopes of gaining approval. They are not taking this lightly; they are fully invested and optimistic about the outcome.
You may have heard rumors about the U.S. Securities and Exchange Commission (SEC) being unresponsive or difficult with applicants. However, Grayscale’s Chief Legal Officer, Craig Salm, remains unfazed. He believes that just because the SEC hasn’t shown interest doesn’t mean it’s all bad news.
Let’s take a step back and look at the bigger picture. Remember when the Bitcoin ETF saga unfolded? It was a wild ride, with every detail scrutinized. But here’s the interesting part: during that process, many issues were addressed, such as the creation and redemption process, asset protection, and custody. Salm believes that since the SEC has already dealt with Bitcoin ETFs, they are well-prepared for Ethereum ETFs. They have seen this before and should know how it ends.
But don’t get too comfortable just yet. There’s a twist in the story – staking. Several major players, including Ark 21Shares, Fidelity, and Franklin Templeton, want to incorporate staking into their Ethereum ETF offerings. This is an area where they will need to negotiate with the SEC.
On the other hand, Bloomberg’s ETF experts, Eric Balchunas and James Seyffart, have become more pessimistic about the approval odds, reducing them to a mere 25% after sensing the SEC’s silence. Balchunas even described it as a “pessimistic 25%,” suggesting that the SEC’s silence may be a deliberate strategy rather than a delay tactic.
But here’s where things get interesting. The recent approval of Ether Futures ETFs has created a positive outlook for spot Ether ETFs. This approval demonstrates that Ether products can operate within the regulated space, setting a precedent for spot Ether ETFs to follow suit. The connection between futures and spot products is not weak; it’s strong, indicating a good chance of approval.
Coinbase’s chief legal expert, Paul Grewal, and former Commodity Futures Trading Commission member, Brian Quintenz, share this sentiment. They see the approval of Ether Futures ETFs as a positive sign for the spot variant.
The list of applicants for Ether ETFs reads like a who’s who of the finance industry, with big names such as BlackRock, VanEck, ARK 21Shares, Fidelity, Invesco Galaxy, and of course, Grayscale, all vying for approval. The countdown is on until May 23, the day the SEC will make a decision on VanEck’s application—a date marked in red on everyone’s calendar.