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U.S. Securities and Exchange Commission Postpones Decision on Grayscale Ethereum Futures Trust’s ETF Application
The U.S. Securities and Exchange Commission (SEC) recently announced that it will be delaying its decision regarding the approval of Grayscale Ethereum Futures Trust’s Ethereum Exchange-Traded Fund (ETF) application. The SEC filed a document on Friday specifying that the new deadline for the decision is set for May 30, 2024.
According to the Securities Exchange Act of 1934, the SEC has 180 days or six months from the date of publication of the proposed rule change to make a decision. Grayscale initially submitted the ETF application in September, and the SEC opted to defer its decision in November.
The commission stated that it requires additional time to thoroughly review the proposed rule change and the related concerns. This delay aligns with previous announcements made by the SEC regarding similar matters.
Bitcoin and Ethereum ETFs function as investment funds that mirror the price movement of digital assets and are traded on traditional stock exchanges. These ETFs enable investors to gain exposure to the cryptocurrency market without directly holding the underlying tokens. An Ethereum futures ETF focuses on predicting the future price of the asset as opposed to a spot ETF, which monitors the current real-time price.
Earlier this year, the SEC approved 11 Bitcoin ETFs but postponed its decision on a spot Ethereum ETF application from Grayscale and BlackRock. Additionally, the commission delayed its decision on a joint spot Ethereum ETF proposal from investment firms Invesco and Galaxy Digital.
While the postponement of the Ethereum futures ETF decision may disappoint some cryptocurrency enthusiasts, others view it as a positive development. Delaying the approval provides more time for the market to adjust and offers potential benefits for the adoption of Bitcoin ETFs.
Matt Hougan, Bitwise’s Chief Information Officer, remarked on Twitter that “Spot Ethereum ETFs will gather more assets if they launch in December versus if they launch in May. TradFi needs more time to digest the Bitcoin ETFs.”
The SEC’s decision to defer the Ethereum ETF ruling has contributed to downward pressure on Ethereum’s price. As of the latest data, Ethereum is down 10.4% for the week and is currently trading at $3,289, according to Coingecko.
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