Bloomberg analyst believes Grayscale’s ETH futures ETF is a strategy to get approval for a spot ETH ETF
Bloomberg ETF analyst James Seyffart suggests that Grayscale Investments’ recent filing for an Ether (ETH) futures exchange-traded fund (ETF) is a strategic move aimed at gaining approval for a spot ETH ETF. Seyffart argues that Grayscale is using the futures ETF as a “trojan horse” to persuade the U.S. Securities and Exchange Commission (SEC) to greenlight its spot ETH ETF application.
Grayscale, known for its Bitcoin (BTC) and Ethereum investment products, filed for a futures ETF on November 19. This came after the SEC’s rejection of multiple Bitcoin ETF applications. Seyffart believes that Grayscale’s move is a deliberate attempt to leverage the SEC’s approval of a futures ETF to strengthen its case for a spot ETH ETF.
Grayscale’s aim to corner the SEC
Seyffart suggests that Grayscale is aiming to “corner the SEC” by securing approval for its futures ETF. He believes that once the SEC approves an ETH futures ETF, it will be more difficult for the regulator to deny the approval of a spot ETH ETF. Seyffart asserts that Grayscale’s intentions are to create a precedent with the futures ETF that will make it challenging for the SEC to justify rejecting a similar product focused on spot ETH.
Spot ETH ETF prospects
Grayscale is not the only player seeking the launch of a spot ETH ETF. Several other firms, including VanEck and WisdomTree, have also filed applications for ETH ETFs. While the SEC has not yet approved a Bitcoin or Ethereum ETF, the growing interest by major financial institutions indicates a trend toward greater acceptance and recognition of cryptocurrencies.
SEC’s stance on ETFs and cryptocurrencies
The SEC has historically been conservative in its approach to approving cryptocurrency-related ETFs. The regulator has cited concerns over market manipulation, custody issues, and investor protection as reasons for rejecting previous applications. However, Seyffart points out that the SEC’s approval of a Bitcoin futures ETF last month may signal a shift in its stance and a potentially favorable environment for ETH ETF applications.
Grayscale’s track record and influence
Grayscale Investments has been a significant player in the cryptocurrency investment space. The firm currently manages billions of dollars in digital assets, making it one of the largest cryptocurrency asset managers globally. Grayscale’s Bitcoin Trust and Ethereum Trust are some of its most prominent investment products. Given its influence and reputation, Grayscale’s strategic move to file for an ETH futures ETF could have a significant impact on the SEC’s decision-making process.
Conclusion
Bloomberg analyst James Seyffart believes that Grayscale Investments’ recent filing for an ETH futures ETF is a tactical move to persuade the SEC to approve a spot ETH ETF. If the SEC grants approval for the futures ETF, it could create a precedent that makes it difficult to deny a spot ETH ETF. With other firms also vying for a spot ETH ETF, the SEC’s decision will have broader implications for the cryptocurrency industry. Grayscale’s track record and influence further add weight to its strategy, potentially increasing the likelihood of a positive outcome for the spot ETH ETF.