Ethereum ETF Application Withdrawn by Grayscale Ahead of SEC Decision

Grayscale has unexpectedly withdrawn its application for an Ethereum (ETH) futures exchange-traded fund (ETF) with the United States Securities and Exchange Commission (SEC). The applicant’s withdrawal would have compelled the securities regulator to make a decision on the application three weeks earlier.

The cryptocurrency asset manager filed a notice to withdraw the Grayscale Ethereum Futures Trust application with the SEC on May 7. Grayscale’s Ether futures ETF decision by the SEC was scheduled for May 30.

If approved, the New York Stock Exchange would have listed Grayscale’s application for the Ether futures ETF, which it had initially filed on September 19, 2023.

Bloomberg ETF analyst James Seyffart had initially believed that Grayscale planned to use its Ether futures ETF as a strategic move to pressure the SEC into approving its spot Ether ETF. However, he expressed confusion over Grayscale’s decision to withdraw the application now, with the SEC set to decide on at least one spot Ether ETF application on May 23, just over two weeks away.

Idk why they'd do this honestly. In my mind might as well make the SEC write up an approval or denial for an ETH futures ETF and go from there? Maybe the SEC spoke with Grayscale about this… And whatever was said convinced Grayscale to withdraw? (This is a complete guess)

— James Seyffart (@JSeyff) May 7, 2024

SEC’s Decision Looms Over Ethereum ETFs

For several months, Seyffart and fellow Bloomberg ETF analyst Eric Balchunas had been estimating a 25% chance that the spot Ether ETFs would receive approval on May 23, down from a 70% chance in January.

However, comments from SEC Chair Gary Gensler in a May 7 interview with CNBC suggest that the SEC is still weighing its decision on the spot Ether ETFs. Gensler stated, “That’s something in front of our Commission right now. We’re a five-member Commission, and those filings will take up at the appropriate time.”

The SEC must decide on VanEck’s spot Ether ETF application on May 23, while ARK 21Shares and Hashdex have final deadlines on May 24 and May 30, respectively. We must decide on applications from Grayscale, Invesco Galaxy, BlackRock, and Fidelity in June, July, and August. However, many industry experts expect the securities regulator to decide on all or most applicants as it did with the spot Bitcoin ETFs in January.

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