Grayscale's Strategic Maneuver to Secure Spot Ether ETF Approval from SEC
Summary:
Bloomberg ETF analyst, James Seyffart, suggests Grayscale Investments is tactically using its Ether futures ETF application as leverage to get approval from the US Securities and Exchange Commission (SEC) for its spot Ether ETF. Seyffart believes this is a strategy to highlight any perceived differential treatment by the SEC concerning Bitcoin and Ether futures ETFs. The aim is not to launch the Ether futures ETF, but to use it as a stepping stone for spot Ether ETF, agreed Seyffart and Scott Johnsson of Van Buren Capital General.
Grayscale Investments reportedly has a strategic plan to compel the United States Securities and Exchange Commission (SEC) into greenlighting its spot Ether ETF by using its Ether (ETH) futures exchange-traded fund (ETF) application as an ingenious tool. This insight was provided by James Seyffart, Bloomberg ETF analyst. Seyffart, on November 15, suggested through a tweet that if the SEC gives a nod to Grayscale’s application, the company would have a valid reason to push for approval of its spot Ether ETF application. If, however, the SEC declines Grayscale's application, it could be interpreted as differential treatment between Bitcoin (BTC) and Ether futures ETFs given the provisions of the Securities Act of 1933. Seyffart noted that Grayscale’s Ether futures ETF application was submitted via a form known as 19b-4 — a mechanism used to inform the SEC of a security-based swap request. The fact that no approved Ether ETF product has undergone this process intrigued him. He initially questioned Grayscale's move to file its Ether futures ETF via a 19b-4 but later realized it's a tactical maneuver to force the SEC into a tricky situation. Seyffart, sharing the same viewpoint with Scott Johnsson, the General President at Van Buren Capital General, contended that Grayscale isn’t interested in launching an Ether futures ETF. Johnsson noted it's more of a conduit to get approval for the spot Ether ETF. The SEC delayed its decision on Grayscale’s Ether futures ETF on November 15, a move Seyffart had anticipated. Furthermore, The SEC also stalled Hashdex's application to turn its Bitcoin futures ETF into a spot product on the same day. Last week, BlackRock echoed Seyffart's sentiments, stating a lack of logical reason for the SEC to handle cryptocurrency spot and futures ETF applications differently.
Published At
11/16/2023 1:26:26 AM
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