Grayscale Holds Optimism for Ether ETFs Approval Amid SEC Engagement Concerns
Summary:
Despite rumors of the U.S. securities regulator's disengagement with ETF applicants, Grayscale remains optimistic about the approval of Ether (ETH) spot exchange-traded funds in May. The company's Chief Legal Officer, Craig Salm, asserts that past challenges with spot Bitcoin ETFs have been resolved, positioning Ether ETFs strongly for approval. However, concerns have been raised over the SEC's apparent lack of engagement, with Bloomberg analysts reducing odds for a spot Ether approval to 25%. Still, the recent approval of Ether Futures ETFs is believed to fortify spot Ether ETFs' chances for approval.
Grayscale maintains its belief that Ether (ETH) spot exchange-traded funds (ETFs) will receive authorization in May, undeterred by the recent rumors of the U.S. securities regulator's perceived disengagement with contenders. Grayscale's Chief Legal Officer, Craig Salm, commented on a recent X post that the supposed dismissiveness of regulators should not be interpreted as indication of the ETFs' final decision. He remains optimistic and holds the view that the ETFs will eventually receive approval.
Salm stated that during the time leading up to spot Bitcoin ETFs' approval, many similar issues, related to spot Ether ETFs, including procedures for creation and redemption, cash and in-kind models, asset protection, prevention of losses, and custody, were all resolved. Thus, implying that the SEC has already been involved, and issuers actually have less to address this time around. Salm also stated, “The case for spot Ether ETFs is equally as compelling as it was for spot Bitcoin ETFs.”
However, ETF issuers intending to incorporate staking into their Ether ETFs would have to settle an additional hindrance with the regulators. Ark 21Shares, Fidelity, and Franklin Templeton are among these applicants. Yet, concerned voices have been raised by Bloomberg ETF analysts Eric Balchunas and James Seyffart over the SEC's apparent disinterest. Consequently, their estimated odds for a spot Ether approval in May have dropped to a mere 25%.
Balchunas shared his thoughts in a March 25 X post, giving an air of pessimism to the 25% probability, indicating that the SEC's seeming aloofness appears more intentional than due to delay tactics.
Despite this, Salm holds an optimistic view on the back of the recent approval of Ether Futures ETFs. The regulation of these products as commodity futures strengthens the position of spot Ether ETFs for approval, as there is a significant correlation between futures and spot products. Coinbase's chief legal officer, Paul Grewal, and Brian Quintenz, a former Commodity Futures Trading Commission commissioner, also drew a similar conclusion last week.
Among the applicants for approval of spot Ether ETFs from the SEC are BlackRock, VanEck, ARK 21Shares, Fidelity, Invesco Galaxy, Grayscale, Franklin Templeton, and Hashdex. The SEC's decision regarding VanEck's application is anticipated by May 23, with predictions suggesting all applicants will learn their outcomes on the same date.
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Published At
3/26/2024 3:02:31 AM
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