Grayscale files for new Ethereum futures ETF

Posted: September 20, 2023

• The time is ripe for Grayscale as it recently won a legal battle against the SEC last month.
• At least 12 applicants have filed for ether futures ETFs so far.

Grayscale has submitted a filing for a new Ethereum [ETH] futures exchange-traded fund (ETF), reported the Wall Street Journal (WSJ).

The investment firm has submitted its filing under the Securities Act of 1933, unlike its previous filing submitted under the Investment Company Act of 1940.

At least 12 applicants, including Volatility Shares, Bitwise, ProShares, VanEck, Roundhill, and Valkyrie Investments, have filed for Ethereum futures ETFs so far.

UPDATE: We’re at 12. it’s late but I missed one today. @Bitwise actually filed for two ETFs. Equal weight and market weight versions of their dual #Bitcoin and #Ethereum futures ETFs. We’re up to a full dozen Ether futures ETF filings now. Feel like we will get another tomorrow. https://t.co/DWYvEfEKNc pic.twitter.com/q1R1GCkvz5

— James Seyffart (@JSeyff) August 4, 2023

Since 2021, the U.S. Securities and Exchange Commission (SEC) has approved a number of Bitcoin [BTC] futures ETFs. But it has not approved any spot Bitcoin ETFs so far. The industry is hopeful that the regulatory body will approve Ethereum futures ETFs similarly.

Will the recent legal victory help Grayscale?

The time is particularly ripe for Grayscale securing approval for Ethereum futures ETF, as it secured a victory in its legal battle with the SEC last month.

It all began in late 2021 when Grayscale filed with the SEC to convert Grayscale Bitcoin Trust (GBTC) into a Bitcoin spot ETF. But the SEC denied Grayscale’s request in June 2022, citing non-fullfilment of anti-fraud and investor protection requirements. Grayscale soon filed an appeal against the decision.

Eventually, the court ruled in August 2023 that the SEC should review Grayscale’s application. Judges in the D.C. Court of Appeals said,

“The Commission’s unexplained discounting of the obvious financial and mathematical relationship between the spot and futures markets falls short of the standard for reasoned decision making.”

Grayscale was thus trying to convert at least one of its funds to a crypto ETF.

If we look at the metrics, we can observe that the Grayscale victory certainly pushed ETH’s price above the $1,700-price mark for a few ensuing days. But its price couldn’t remain buoyant and fell to $1,600-level soon enough. At press time, ether was trading at $1,634.

Source: ETH/USD, TradingView