Grayscale Investments, a prominent cryptocurrency asset management firm, has recently submitted a filing for a new Ethereum futures exchange-traded fund (ETF), according to a report by the Wall Street Journal. The filing was made under the Securities Act of 1933, which distinguishes it from Grayscale’s previous attempts at an Ethereum futures ETF that were submitted under the Investment Company Act of 1940.
The U.S. Securities and Exchange Commission (SEC) has previously approved several Bitcoin futures ETFs under both the 1933 and 1940 Acts. While spot Bitcoin ETFs, which have not yet gained approval, have been filed under the 1933 Act. This implies that the SEC’s previous approval of Bitcoin futures ETFs and the overall positive sentiment towards cryptocurrency ETFs could make Ethereum futures ETFs a lucrative pursuit for asset managers.
Following this trend, a number of asset managers have already applied for Ethereum futures ETFs. Volatility Shares, Bitwise, ProShares, VanEck, Roundhill, and Valkyrie Investments are among the companies that have recently sought approval for such ETFs. Hashdex and several other firms have also filed applications, bringing the total number of applicants to at least 12.
What makes Grayscale’s pursuit of an ETF particularly significant is the fact that it aims to convert its existing GBTC fund into a spot Bitcoin ETF. Although the SEC initially rejected Grayscale’s application in 2022, the company secured a partial legal victory in August. This victory is likely to prompt the SEC to review the application, as judges in the D.C. Court of Appeals stated that Grayscale’s proposed ETF conversion is “materially similar” to previously approved Bitcoin futures ETFs.
However, it’s important to note that the recent ruling does not guarantee approval of Grayscale’s proposed ETF. The SEC is only required to review the application. Several other firms are also closely following the pursuit of Bitcoin spot ETFs, leveraging a much-discussed application lodged by BlackRock in June. Grayscale’s own spot Bitcoin ETF application predates and differs from BlackRock’s application, as it pertains to an existing fund.
In conclusion, Grayscale’s recent filing for a new Ethereum futures ETF demonstrates the company’s commitment to expanding its offerings and capitalizing on the growing demand for cryptocurrency investment vehicles. With multiple asset managers actively pursuing ETFs related to Ethereum and Bitcoin, it is clear that the industry is eager to provide investors with more accessible options for exposure to the digital asset market.
