Becoming an Ethereum Spot ETF: Grayscale Seeks Approval

Introduction

In a bold move, Grayscale, the world’s largest crypto asset manager, has partnered with the New York Stock Exchange (NYSE) Arca to apply for another Ethereum (ETH) exchange-traded fund (ETF). This time, they are seeking to transform Grayscale’s Ethereum Trust into an Ethereum spot ETF.

Grayscale Applies for Ethereum Spot ETF

On October 2, 2023, the NYSE Arca filed a document with the US Securities and Exchange Commission (SEC). The document is an application to convert Grayscale’s Ethereum Trust into an Ethereum ETF, specifically an Ethereum spot ETF.

SEC Accepting Ethereum Futures ETFs

The SEC has recently been receiving multiple ETF applications, including Ethereum futures ETFs. While Grayscale, with the help of NYSE Arca, seeks approval for an Ethereum spot ETF, the SEC is already on the verge of accepting several Ethereum futures ETFs.

Ethereum Spot ETF vs Ethereum Future ETF

An Ethereum spot ETF invests in physical Ethereum (ETH) and tracks its current market price. It offers investors the opportunity to directly invest in Ethereum itself. On the other hand, an Ethereum futures ETF invests in futures contracts based on the expected future price of Ethereum.

Grayscale’s Battle for a Bitcoin ETF

The SEC has been busy reviewing a range of ETF applications, including Bitcoin spot and future ETFs, Ethereum spot and future ETFs, and various other types. Prominent companies like BlackRock, Valkyrie, Fidelity, and VanEck have all recently applied for their own Bitcoin ETFs.

Previously, Grayscale’s request to launch a Bitcoin spot ETF was scrutinized by the SEC. Although Grayscale initially applied for this ETF in 2022, it was quickly rejected by the SEC. Feeling that the SEC’s rejection was unjust, Grayscale took legal action against the regulatory body.

Over a year later, on August 28, Grayscale emerged victorious in this lawsuit. As a result, the SEC is now obliged to reevaluate the ETF for approval or rejection. The announcement of this victory caused a rapid 5% increase in the Bitcoin price within half an hour. However, the ultimate approval of this ETF, like all others, remains uncertain.

Conclusion

Grayscale’s pursuit of an Ethereum spot ETF demonstrates their commitment to expanding investor access to digital assets. As the SEC continues to review and consider various ETF applications, the market eagerly awaits the approval of these innovative investment vehicles. Only time will tell how these ETFs will shape the landscape of the crypto industry.