Grayscale Investments has withdrawn its 19b-4 filing for an Ethereum futures exchange traded fund (ETF).
This unexpected decision sparked speculation and curiosity within the investment ecosystem. Bloomberg ETF Senior Analyst James Seifert announced this, and the industry is questioning Grayscale's strategic intent.
Reasons for withdrawal remain unclear
The reason for Grayscale's withdrawal was not immediately known. The asset management company filed for the Ethereum futures ETF in September 2023, shortly after securing a legal victory against the U.S. Securities and Exchange Commission (SEC) for the Spot Bitcoin ETF. Industry analysts believe that Grayscale aimed to leverage the Ethereum futures ETF application to strengthen its spot on the Ethereum ETF. But Seifert suggested that the SEC advised Grayscale and may have influenced its decision to exit.
Seifert said Grayscale may be adhering to its main objective of securing approval for spot ETFs. He speculates that the SEC may choose to approve an Ethereum futures ETF while rejecting a spot ETF, potentially impacting Grayscale's chances of success. The withdrawal came just before the SEC was required to rule on Grayscale's application, further heightening the intrigue surrounding the company's motives.
Speculation mounts over potential SEC decision
The SEC’s decision on Grayscale’s Ethereum Futures ETF was expected on May 30th. Bloomberg ETF analysts James Seifert and Eric Balchunas estimate that the chance of an Ethereum ETF spot application being approved is 25%, down from a 70% chance earlier this year.
Officials are now speculating that concerns about the regulatory environment may have influenced Grayscale's decision to exit. The SEC is currently considering how to classify Ethereum as an investment contract. Such a classification would strengthen the SEC's stance on Ethereum-based investment products. This could have implications for future issuers such as BlackRock, Fidelity Investments, and Bitwise, who are also seeking approval for Ethereum ETFs.
Spot Ethereum ETF application deadline approaches
The SEC is expected to make a decision on VanEck's Spot Ethereum ETF application by May 23rd. Additionally, the deadlines for ARK 21Shares and Hashdex are set for May 24th and May 30th, respectively. Subsequent deadlines for Grayscale, Invesco Galaxy, BlackRock and Fidelity are expected in the coming months.
Despite these different deadlines, industry experts believe the SEC may choose to follow the approach taken with the Spot Bitcoin ETF in January and announce decisions on all applications at the same time. ing.
