Asset manager Grayscale Investments has updated its application for an Ethereum spot ETF (exchange-traded fund) with the U.S. Securities and Exchange Commission (SEC).
The case for an Ethereum spot ETF is as solid as Bitcoin, Grayscale claims.
According to a recent post by Grayscale Chief Legal Officer Craig Salm on Salm claimed the move was “significant” in Grayscale’s efforts to list and trade shares of the Ether Trust on the New York Stock Exchange (NYSE) Arca.
The chief legal officer said in his post that investors “want and deserve access” to Ethereum through spot exchange-traded products, likening the situation to the Bitcoin ETF story. “We believe the case is as strong as it is for spot Bitcoin ETFs,” Salm said.
The asset manager is one of a number of companies seeking to launch the first Ethereum spot ETF in the United States, filing an application with the SEC on October 10, 2023. However, these ETF applications have faced multiple delays, most recently against BlackRock’s March 4, 2024 filing.
As a result, the likelihood that the SEC will approve an Ethereum spot ETF has plummeted in recent weeks. Balchunas, the once-bullish Bloomberg ETF expert, said in a recent analysis that the ETH fund’s chances of approval are now just 35%.
Two Democratic U.S. senators, Senator Lafonza Butler of California and Jack Reed of Rhode Island, urged the SEC chairman to avoid approving cryptocurrency investment products. In a March 11 letter, the lawmakers, who are also members of the Senate Banking Committee, asked the committee to limit future cryptocurrency ETF applications.
The success of BTC spot products is certainly ruffling some feathers on the hills. @Senator Jack Reed and @senraponja write on @SECGov Urge:
-There are no additional ETPs for other tokens.
-Make life difficult for brokers and advisors recommending BTC ETPs (e.g. inspection/review). pic.twitter.com/enxdumC02N— Alexander Grieve (@AlexanderGrieve) March 14, 2024
Following the approval of 11 Bitcoin spot ETFs in January, the cryptocurrency public’s attention has somewhat turned to whether the SEC will do the same for the Ethereum version. However, a recent letter from the Senate appears to further undermine the chances of ETH ETF approval.
Part of the letter follows:
Retail investors will face enormous risk with ETPs, which refers to cryptocurrencies with low trading volumes or whose prices are particularly vulnerable to pump-and-dump or other fraud schemes,” they said. “The Commission has no obligation to approve such products and, given the risks, it should not.
As of this writing, the Ethereum token price is $3,731, up 1.2% from the previous day.
Ethereum price on a deep correction on the daily timeframe | Source: ETHUSDT chart on TradingView
Featured image from The Economic Times, chart from TradingView
Disclaimer: This article is provided for educational purposes only. This does not represent NewsBTC’s opinion on whether to buy, sell or hold any investment, and of course investing carries risks. We recommend that you do your own research before making any investment decisions. Your use of the information provided on this website is entirely at your own risk.