In an unexpected move, Grayscale has withdrawn its application for an Ethereum futures exchange-traded fund (ETF), originally aimed to be listed on the New York Stock Exchange. The application, filed on September 19, 2023, was pulled from consideration by the United States Securities and Exchange Commission (SEC) on May 7, just three weeks before a mandatory decision deadline.
Timeline of Events and Regulatory Background
Grayscale’s Ethereum Futures Trust faced a final decision by the SEC scheduled for May 30. This decision was part of a broader context in which the SEC is also expected to rule on several spot Ether ETF applications, including one on May 23. Analysts had speculated that Grayscale’s futures ETF could serve as leverage in securing approval for its spot Ether ETF—a strategy noted by Bloomberg ETF analyst James Seyffart.
Also Read: Grayscale’s Bitcoin ETF Sees First Net Inflow After Extensive Outflows
Speculation and Analyst Insights
Seyffart, along with his colleague Eric Balchunas, had previously estimated a 25% chance of approval for the spot Ether ETFs, a significant drop from 70% earlier in the year. The recent withdrawal by Grayscale adds to the complexity, given that the SEC, led by Chair Gary Gensler, is still deliberating over the upcoming spot Ether ETF applications.
In an interview on May 7, Gensler commented on the ongoing considerations within the Commission, highlighting the careful review process involving multiple applications, with decisions pending for ETFs from major firms like VanEck, ARK 21Shares, and Hashdex later in May.
Industry Implications and Future Outlook
The industry awaits the SEC’s decisions, expected to potentially align with the approach taken earlier this year regarding spot Bitcoin ETFs. With applications from notable firms such as Invesco Galaxy, BlackRock, and Fidelity scheduled for review in the coming months, Grayscale’s recent withdrawal could signal strategic shifts within the sector, influencing future filings and regulatory strategies.
