Grayscale Investments, the world’s largest cryptocurrency asset manager, has withdrawn its application for an Ether futures exchange-traded fund (ETF) just three weeks before the US Securities and Exchange Commission (SEC) was set to rule on several spot ETH ETFs.
The sudden withdrawal has left analysts and the market in confusion, with speculation that the futures ETF was a strategic tool to pressure the SEC into approving a spot Ether ETF.
Despite the withdrawal, the fate of spot Ethereum ETFs remains uncertain as the SEC has not provided a specific timeline for a decision.
Grayscale Withdraws Ether Futures ETF Application
Grayscale Investments, the world’s largest cryptocurrency asset manager, has withdrawn its application for an Ether futures ETF just weeks before the SEC was set to rule on several spot ETH ETFs. The application, filed in September 2023, proposed an ETF that would track Ether futures contracts on the Chicago Mercantile Exchange (CME). The sudden withdrawal has left analysts scrambling to understand Grayscale’s strategic shift.
Possible Strategic Tool?
Bloomberg ETF analyst James Seyffart has speculated that Grayscale might have been using the futures ETF as a strategic tool to pressure the SEC into approving a spot Ether ETF, a product that directly tracks the price of Ethereum. However, this speculation mirrors the broader market sentiment, as the withdrawal comes just weeks before the SEC has deadlines to rule on several spot Ether ETF applications from other companies.
Uncertain Future for Spot Ethereum ETFs
The SEC’s stance on spot Ether ETFs remains unclear. In a recent interview, SEC Chair Gary Gensler acknowledged the applications but did not provide a specific timeline for a decision. Grayscale’s withdrawal leaves the fate of spot Ethereum ETFs uncertain. While applications from other companies are still expected in the coming months, industry experts anticipate a similar batch decision-making process from the SEC, mirroring its approach with spot Bitcoin ETFs in January 2023.
Ethereum (ETH) Price Action after Grayscale Decision
Grayscale’s decision to withdraw it ETH futures application has dampened market demand for Ethereum. Despite the positive sentiment surrounding the broader crypto market, ETH price uptrend now appears to be struggling for momentum.
At the time of writing on May 8, Ethereum price is exchanging hands at $2,991, reflecting a 7.38% dip over the last 48 hours, as depicted in the ETH daily price chart below.
Ethereum ETH Price Action, May 8 2024
The withdrawal of Grayscale’s Ether futures ETF application adds a layer of uncertainty to the future of spot Ethereum ETFs. With the SEC yet to provide a clear timeline for a decision, the market can only speculate on the possible outcomes. As the world watches, the fate of Ethereum ETFs hangs in the balance.
This article was originally posted on FX Empire
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