Grayscale applies for new Ethereum futures ETF

Grayscale has submitted a filing for a new Ethereum futures exchange-traded fund (ETF), the Wall Street Journal said on Sept. 19.

According to that report, Grayscale submitted its filing under the Securities Act of 1933. The filing is distinct from Grayscale’s previous attempts at an Ethereum futures ETF, which it submitted under the Investment Company Act of 1940.

The Wall Street Journal noted that the U.S. Securities and Exchange Commission (SEC) has approved a number of Bitcoin futures ETFs under both the 1933 and 1940 Acts. Spot Bitcoin ETFs, none of which have been approved, have been filed under the 1933 Act.

The fact that the SEC approved certain earlier Bitcoin futures ETFs starting around October 2021 — combined with more general optimism around cryptocurrency ETFs — could make Ethereum futures ETFs a viable pursuit for asset managers.

Indeed, multiple asset managers have already jumped on the trend. In recent weeks, Volatility Shares, Bitwise, ProShares, VanEck, Roundhill, and Valkyrie Investments have all applied for Ethereum futures ETFs. The Wall Street Journal identified Hashdex as another applicant; various other firms bring the number of applicants to at least 12.

Grayscale is also pursuing a Bitcoin spot ETF

Grayscale’s attempts to obtain an ETF of any type are especially notable because the firm plans to convert its existing GBTC fund into a spot Bitcoin ETF. Though the SEC initially disapproved Grayscale’s application in 2022, Grayscale gained a partial legal victory in August that will likely force the SEC to review the application.

As noted by the Wall Street Journal, judges in the D.C. Court of Appeals said that Grayscale’s proposed ETF conversion is “materially similar” to other, previously approved Bitcoin futures ETFs — seemingly a nod in the company’s favor.

But despite widespread optimism, that ruling will not necessarily require the SEC to approve Grayscale’s proposed ETF. The SEC merely needs to review the application.

Other firms are also pursuing Bitcoin spot ETFs closely modeled on a much-hyped application filed by BlackRock in June. Grayscale’s own spot Bitcoin ETF application precedes and differs from BlackRock’s application as it concerns an existing fund.

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