Despite the withdrawal, the fate of Ethereum spot ETFs remains uncertain as the SEC has not provided a specific timeline for a decision.
Grayscale withdraws application for Ether Futures ETF
Grayscale Investments, the world’s largest cryptocurrency asset manager, withdrew its application for an Ether futures ETF just weeks before the SEC ruled on several ETH spot ETFs. The application, filed in September 2023, proposed an ETF that would track Ether futures on the Chicago Mercantile Exchange (CME). This sudden withdrawal has left analysts scrambling to understand Grayscale’s strategic shift.
A possible strategic tool?
Bloomberg ETF analyst James Seyffart speculated that Grayscale may have used the futures ETF as a strategic tool to pressure the SEC into approving a spot Ether ETF, a product that directly tracks the price of Ethereum. However, this speculation reflects broader market sentiment, as the withdrawal comes just weeks before the SEC has deadlines to rule on several one-time Ether ETF applications from other companies.
Uncertain future for Spot Ethereum ETFs
The SEC’s position on Ether spot ETFs remains unclear. In a recent interview, SEC Chairman Gary Gensler acknowledged the applications but did not provide a specific timetable for a decision. Grayscale’s withdrawal leaves the fate of spot Ethereum ETFs uncertain. While applications from other companies are still expected in the coming months, industry experts expect a similar batch decision-making process from the SEC, mirroring its approach with spot Bitcoin ETFs in January 2023 .
Ethereum (ETH) Price Action After Grayscale Decision
Grayscale’s decision to withdraw its ETH futures app has dampened market demand for Ethereum. Despite the positive sentiment surrounding the broader crypto market, the upward price trend for ETH now appears to be struggling to gain momentum.
At the time of writing on May 8, Ethereum price is trading at $2,991, reflecting a 7.38% decline over the past 48 hours, as seen in the daily price chart of ETH below.
