Hold onto your hats, folks, because Grayscale is diving headfirst into the deep end with their eyes locked on the prize: the much-anticipated approval of spot Ether (ETH) exchange-traded funds (ETFs). They’re not just whistling past the graveyard here; they’ve got skin in the game and a hefty dose of optimism to boot.
Now, you might have caught wind of some murmurs going around about the U.S. Securities and Exchange Commission (SEC) giving the cold shoulder to applicants, playing hard to get, or just plain ghosting them. But let’s get one thing straight – Grayscale’s Chief Legal Officer, Craig Salm, isn’t losing any sleep over it. According to him, just because the SEC isn’t sliding into their DMs, doesn’t mean it’s all doom and gloom.
The Road Less Traveled: From Bitcoin to Ethereum ETFs
Let’s rewind a bit and put things into perspective. Remember when the whole spot Bitcoin ETF saga unfolded? That was quite the rollercoaster, with every twist and turn scrutinized. But here’s the kicker: during that whole dance, a lot of the kinks were worked out – we’re talking about the nuts and bolts like how these ETFs would handle the creation and redemption process, asset protection, and custody, among other things. Salm is leaning heavily into this, suggesting that since the SEC has already tangoed with Bitcoin ETFs, they’re pretty much warmed up for the Ethereum ETFs. They’ve seen this movie before and know how it ends, or at least they should.
Now, don’t get too comfy thinking it’s all smooth sailing from here. There’s a twist in the tale – staking. Yeah, that’s the extra spice in the Ethereum ETF gumbo. Some of the big players, including names like Ark 21Shares, Fidelity, and Franklin Templeton, are looking to weave staking into their Ethereum ETF offerings. That’s one area where they’ll need to hash things out with the SEC. See what I did there?
Meanwhile, over in the analysts’ corner, Bloomberg’s ETF duo, Eric Balchunas and James Seyffart, were feeling a bit gloomy, dropping their approval odds to a mere 25% after catching a whiff of the SEC’s silent treatment. Balchunas even called it a “pessimistic 25%”, hinting that the SEC’s silence might be a tactical maneuver rather than just dragging their feet.
A Glimmer of Hope in the Regulatory Labyrinth
But here’s where it gets interesting. The recent thumbs-up for Ether Futures ETFs has painted a pretty picture for the spot Ether ETF hopefuls. Why? Because it showcases that Ether products can play ball in the regulated space, setting a precedent that spot Ether ETFs could follow suit. The connection between futures and spot products isn’t just a flimsy thread; it’s a solid rope, suggesting a strong chance of approval.
Echoing this sentiment, Coinbase’s chief legal eagle, Paul Grewal, and former Commodity Futures Trading Commission hotshot, Brian Quintenz, chimed in with their two cents, seeing the approval of Ether Futures ETFs as a positive sign for the spot variant.
The applicant pool is looking like a who’s who of the finance industry, with big names like BlackRock, VanEck, ARK 21Shares, Fidelity, Invesco Galaxy, and, of course, Grayscale themselves, all throwing their hats into the ring. The clock is ticking down to May 23, when the SEC has to make a call on VanEck’s application, a date that’s circled in red on everyone’s calendar.
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