Grayscale Investments, the world’s largest cryptocurrency asset manager, recently withdrew its application for an Ether futures exchange-traded fund (ETF) just three weeks before the US Securities and Exchange Commission (SEC) was set to make a decision on several spot ETH ETFs.
The notice of withdrawal for the Grayscale Ethereum Futures Trust was filed on May 7th, leaving analysts puzzled by the sudden move. The application, filed in September 2023, aimed to create an ETF that would track Ether futures contracts on the Chicago Mercantile Exchange (CME) and be listed on the New York Stock Exchange.
Some analysts, like Bloomberg’s James Seyffart, speculated that Grayscale might be using the futures ETF as a strategic tool to pressure the SEC into approving a spot Ether ETF, which directly tracks the price of Ethereum itself. However, the withdrawal has created uncertainty, especially as the SEC faces upcoming deadlines to rule on spot Ether ETF applications from other companies.
The SEC’s stance on spot Ether ETFs remains unclear, with SEC Chair Gary Gensler offering no specific timeline for a decision in a recent interview. Grayscale’s withdrawal has left the fate of spot Ethereum ETFs uncertain, as industry experts anticipate a similar decision-making process from the SEC as seen with spot Bitcoin ETFs in the past.
Analysts like James Seyffart are not optimistic about the approval of ETH ETFs, suggesting that the current round of applications might ultimately be denied. As the market waits for further developments, the future of Ether ETFs remains uncertain.