Why Is Grayscale Dropping Its ETH Futures App?
Grayscale Investments sent shockwaves through the industry by withdrawing its application for Ethereum Futures ETF. Although the organization did not explain the reason for its decision, the crypto community weighed in on this decision. Additionally, Fox journalist Eleanor Terrett explained potential reasons for the pullback of Grayscale’s Ether Futures ETF.
Why Did Grayscale Withdraw Its ETH Futures ETF?
Grayscale recently made headlines by withdrawing its 19b-4 filing for an Ethereum futures ETF. Bloomberg ETF Research Analyst James Seyffart called the filing a “trojan horse” strategy. He also suggested that Grayscale aims to replicate the conditions that led to the approval of the GBTC Bitcoin ETF.
Additionally, Seyffart emphasized that Grayscale could benefit from the contradictory nature of SEC decisions. To prove his point, he cited the SEC’s decision to approve ETFs based on Bitcoin futures while rejecting Spot Bitcoin ETFs. The analyst added that Grayscale should achieve similar success with its Ethereum futures ETF.
However, the institution played the opposite card and gave up this opportunity. Seyffart suggested that this move was influenced by the SEC. He noted that the SEC may have held a meeting with Grayscale executives and persuaded them to withdraw the Ethereum futures ETF.
Eleanor Terrett, on the other hand, offered another perspective. He noted that Grayscale never completed its S-1 filing for its Ethereum futures ETF. Terrett suggested that the SEC may be waiting to review a finalized futures application before considering a spot application. Meanwhile, Grayscale could be waiting for a full futures application from a competitor.
With no other party having a finalized ETH futures ETF application, Grayscale could pull the plug on the initiative to save time and resources. Additionally, he noted relatively weak investor demand for existing Ethereum futures ETFs since their launch last year.
Terrett suggested that Grayscale’s decision to withdraw its application for an ETH futures ETF could stem from a strategic assessment of resource allocation. Due to decreased demand for existing ETH futures ETFs and potentially limited approval prospects, Grayscale may have chosen to prioritize other initiatives.
SEC Postpones Spot Ethereum ETF Decision
The SEC continued to delay its decision on Spot Ethereum ETF applications. This may also have triggered Grayscale’s latest move. The SEC’s latest filing indicates that the proposed rule change for the Invesco Galaxy Ethereum ETF needs to be thoroughly reviewed.
This decision aims to ensure a comprehensive assessment of the complexities involved before approval is granted. Such actions come amid delays affecting numerous other firms seeking similar approvals, including Grayscale and BlackRock.
The SEC’s cautious approach reflects broader regulatory uncertainty surrounding cryptocurrency offerings. While Grayscale’s Ethereum Trust is already registered, challenges remain, as evidenced by the SEC’s recent call for additional public input. These repeated delays underscore the delicate balancing act regulators face in reconciling regulations with the growing demand for crypto investment vehicles.
✓ Share:
parofix consists of an experienced team of local content writers and editors who work around the clock to cover the news globally and present the news as a fact rather than an opinion. parofix writers and reporters contributed to this article.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
#Grayscale #Dropping #ETH #Futures #App