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America’s Largest Cryptocurrency Exchange Meets with SEC Regarding Grayscale’s Proposed Ethereum ETF
Last week, publicly-listed Coinbase, the biggest cryptocurrency exchange in America, held discussions with the Securities and Exchange Commission (SEC) concerning Grayscale’s plan for a spot Ethereum (ETH) exchange-traded fund (ETF). Documents submitted to the regulator on Wednesday revealed that Coinbase presented its perspective on Grayscale’s proposed product during this meeting.
In October, Grayscale, a crypto fund manager, submitted an application to the SEC seeking approval to convert its Grayscale Ethereum Trust (ETHE) into a spot ETH ETF. This proposed ETF aims to provide investors with direct exposure to the second-largest cryptocurrency, Ethereum. Investors would have the opportunity to purchase shares tracking the price of ETH through trading on a stock exchange.
During Coinbase’s presentation to the SEC, the crypto exchange highlighted concerns related to potential market manipulation. It emphasized that having a “comprehensive surveillance-sharing agreement with the Chicago Mercantile Exchange will assist in surveilling for fraud and manipulation.” The presentation also pointed out the resilience of spot markets for ETH against fraud and manipulation, attributing this strength to mechanisms that significantly reduce the vulnerability of ETH to such activities.
In January, the SEC granted approval for 11 spot Bitcoin (BTC) ETFs to commence trading. After years of rejections, these investment vehicles are now available on stock exchanges and have witnessed substantial success, with significant inflows of capital. Grayscale, a fund manager, was among the entities that received approval and successfully converted its Bitcoin Trust into a spot Bitcoin ETF.
Following this success, Grayscale, alongside other renowned financial institutions, is now seeking approval from the SEC to launch ETH-based products. ETH, as the second-largest digital currency by market capitalization, holds promise for similar success in the ETF market.
Market Expectations and Ethereum’s Price Surge
Standard Chartered, a multinational bank based in the UK, released a report last month predicting that ETH ETFs would receive approval from the SEC by May. The anticipated approval of these products is expected to have a positive impact on the price of Ethereum, potentially leading to a surge in its value.
On Friday, ETH reached $4,000 per coin, marking the first time since 2021 that the price had reached this milestone. Consequently, the current price of ETH hovers slightly below this peak, standing at $3,948, according to data from CoinGecko.
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