SEC Asks for More Time for Decision on Grayscale Ethereum Futures ETF

The US Securities and Exchange Commission (SEC) drew attention by postponing its decision on the Ethereum futures exchange-traded fund (ETF), an initiative by Grayscale Investments. This recently announced move by the SEC highlights regulatory caution amid growing interest in cryptocurrency-based financial products.

Grayscale, recognized for its innovative role in the cryptoasset market, had formalized its application to the SEC in September, aiming to offer investors the opportunity to speculate on the future price of Ethereum (ETH), the second largest digital asset by market value. The proposal aims to create an investment vehicle that allows shareholders to bet on future Ethereum price trends, an idea that has attracted considerable interest.

However, in a move that reflects the SEC’s cautious stance towards cryptoasset-based products, the commission chose to extend the deliberation period. The SEC justified its decision by stating: “The Commission considers it appropriate to designate a longer period to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.”

This is not the first time that the SEC has faced challenging proposals related to crypto assets. The commission is currently evaluating several applications for spot Bitcoin ETFs from large Wall Street entities, including BlackRock. These requests signal a growing interest in investment vehicles that track the value of cryptoassets.

The concept of an ETF, which allows investors to trade shares representing the value of an underlying asset, has been a hot topic in the cryptocurrency world. Despite persistent demand for a Bitcoin ETF over the past decade, the SEC has maintained a refusal stance, citing concerns about market manipulation.

Meanwhile, the US market saw the start of Ethereum futures ETF trading, with companies such as ProShares, VanEck, Bitwise, Valkyrie, Kelly and Volshares launching products on the Chicago Board Options Exchange (CBOE). These developments mark a significant advancement in the institutional acceptance of cryptoassets.

At the same time, Grayscale has found itself at odds with the SEC. The company sued the SEC in June after its request to turn the Grayscale Bitcoin Trust into an ETF was denied, a request that was later ordered for review by a judge in August. Furthermore, in October, Grayscale also requested to transform its Ethereum fund into an ETF.

With these events, Bloomberg Intelligence analysts predict a high probability of the US market approving a Bitcoin ETF by January 10, indicating a possible change in the regulatory stance towards cryptocurrency-based products.

At the time of publication, the price of ETH was quoted at US$2,056.65, up 3.4% in the last 24 hours.

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