Prepare for excitement, ladies and gentlemen, because Grayscale is about to take a daring leap into the deep end while keeping their eyes firmly fixed on the prize: the long-awaited approval of spot Ether (ETH) exchange-traded funds (ETFs). They are not simply ignoring the potential risks; they are fully invested in this endeavor and brimming with optimism.
You may have heard some whispers circulating about the U.S. Securities and Exchange Commission (SEC) giving applicants the cold shoulder, playing hard to get, or even completely ignoring them. However, Grayscale’s Chief Legal Officer, Craig Salm, remains unfazed. According to him, just because the SEC is not responding to their inquiries does not mean that all hope is lost.
Let’s take a step back and put everything into perspective. Remember when the whole spot Bitcoin ETF saga unfolded? It was a wild ride, with every twist and turn scrutinized. But here’s the interesting part: during that entire process, many of the intricacies were ironed out. We’re talking about the nitty-gritty details like how these ETFs would handle the creation and redemption process, asset protection, and custody, among other things. Salm is placing a lot of faith in this, suggesting that since the SEC has already dealt with Bitcoin ETFs, they are well-prepared for the Ethereum ETFs. They have seen this movie before and know how it ends, or at least they should.
But don’t get too comfortable thinking it will be smooth sailing from here. There is a twist in the tale – staking. Yes, that’s the extra spice in the Ethereum ETF mix. Some big players, including Ark 21Shares, Fidelity, and Franklin Templeton, are looking to incorporate staking into their Ethereum ETF offerings. This is an area where they will need to have discussions with the SEC. Do you see what I did there?
Meanwhile, in the world of analysts, Bloomberg’s ETF experts, Eric Balchunas and James Seyffart, are feeling a bit pessimistic, lowering their approval odds to a mere 25% after sensing the SEC’s silence. Balchunas even described it as a “pessimistic 25%”, hinting that the SEC’s lack of response may be a strategic move rather than simply dragging their feet.
However, there is a glimmer of hope in this regulatory maze. The recent approval of Ether Futures ETFs has set a positive precedent for spot Ether ETFs. Why? Because it demonstrates that Ether products can operate within the regulated space, paving the way for potential approval of spot Ether ETFs. The connection between futures and spot products is not flimsy; it is strong, suggesting a high chance of approval.
Coinbase’s chief legal expert, Paul Grewal, and former Commodity Futures Trading Commission member, Brian Quintenz, share this sentiment. They believe that the approval of Ether Futures ETFs is a promising sign for the spot variant.
The list of applicants reads like a who’s who of the finance industry, with big names such as BlackRock, VanEck, Ark 21Shares, Fidelity, Invesco Galaxy, and, of course, Grayscale, all vying for approval. The clock is ticking, with May 23 marked as a crucial date for VanEck’s application.
