Grayscale Withdraws Ethereum (ETH) Futures ETF Application: Unveiling the Mystery

• Grayscale’s proposal to list and trade shares of its Ether futures exchange-traded fund (ETF) has been withdrawn, according to a new document filed on Tuesday.
• The application for the Grayscale Ethereum Futures Trust ETF was filed by NYSE Arca, Inc. in September last year and withdrawn on May 3.
• Despite the withdrawal, the SEC had previously approved a batch of ether futures ETFs in October 2023, including those from ProShares, VanEck, and Bitwise.

Grayscale withdraws its proposal to list and trade shares of its Ether futures ETF, leaving the crypto community in anticipation of the SEC’s decision on spot Ether ETF applications.

Grayscale Withdraws Ether Futures ETF Proposal

Asset management giant Grayscale’s proposal to list and trade shares of its Ether futures ETF has been withdrawn, as per a document filed on Tuesday. The application, filed by NYSE Arca, Inc. in September last year, was withdrawn on May 3. Previously, the SEC had delayed consideration of Grayscale’s ether futures ETF, with the most recent postponement occurring in March.

SEC’s Previous Approval of Ether Futures ETFs

Despite the withdrawal, the SEC had previously approved a batch of ether futures ETFs in October 2023, including those from ProShares, VanEck, and Bitwise. Bloomberg ETF analyst James Seyffart was the first to point out the development. Seyffart initially believed that Grayscale had a strategic plan to use its ether futures ETF to influence the securities regulator into approving its spot ETH ETF.

Analysts’ Take on the Withdrawal

James Seyffart found it puzzling that Grayscale withdrew its application, particularly with the SEC scheduled to decide on at least one spot ether ETF application on May 23, just over two weeks away. Seyffart, along with fellow analyst Eric Balchunas, had previously estimated a 25% chance of approval for spot ether ETFs in May, a decrease from 70% in January. Even with Grayscale’s withdrawal, Seyffart now sees the company as having no alternatives if the SEC doesn’t approve its spot ether ETF.

Conclusion

With Grayscale’s withdrawal, the crypto community is left in anticipation of the SEC’s decision on spot Ether ETF applications. However, comments from SEC Chair Gary Gensler in a May 7 CNBC interview suggest that the SEC is still deliberating on the applications. The withdrawal of Grayscale’s proposal marks a significant development in the crypto industry, and its implications will be closely watched by investors and market participants.