SEC Delays Decision on Grayscale's Ethereum Futures ETF Again, Hits May 30 Deadline

The SEC's repeated delays on Grayscale's Ethereum Futures ETF decision have hit a new deadline of May 30. This push from the initial March 31 target signals a prolonged wait for investors. The regulator cites the need for more time to review the proposed rule change and public comments. This marks the second extension for the Ethereum Futures ETF, with the SEC previously setting a new decision deadline in December 2023.

Has the SEC Hit a Delay Wall on Grayscale's Ethereum Futures ETF?

The Securities and Exchange Commission (SEC) has once again extended the deadline for a decision on Grayscale's Ethereum Futures Trust Exchange-Traded Fund (ETF). The new deadline is May 30, pushing the decision further out from the initial March 31 target.

What's the Deal with the Delay?

The SEC cited the need for more time to review the proposed rule change and the public comments it has received. This marks the second extension for the Ethereum Futures ETF, with the SEC previously delaying the decision to December 2023.

Grayscale's Ambitious Plans

Grayscale's Ethereum Futures ETF aims to invest in Ethereum futures contracts, a derivative product that tracks the price of Ethereum. The ETF would be listed on the New York Stock Exchange under Arca Rule 8.200-E.

A "Trojan Horse" for Spot ETF Approval?

Some analysts have suggested that Grayscale may be using the futures ETF application as a way to influence the SEC's decision on its spot ETF application. The approval of a futures ETF could potentially strengthen Grayscale's case for a spot ETF, which would track the price of Ethereum directly.

SEC's Scrutiny on Crypto ETFs

The delay in Grayscale's Ethereum Futures ETF approval comes amidst increased scrutiny of crypto-based ETFs by the SEC. The SEC recently approved spot Bitcoin ETFs, but the Ethereum ETF space remains uncertain.

Industry Concerns over SEC's Stance

John Lo, founder of Capital, believes the SEC is likely to take a more cautious approach to Ethereum ETFs, given its approval of Bitcoin ETFs. He suggests that the SEC may view the Bitcoin ETF approval as a setback and seek to avoid similar situations.

Other ETF Applications Facing Delays

Grayscale is not alone in facing hurdles in launching Ethereum ETFs. BlackRock and Fidelity have also seen delays in their Ethereum Trust and Ethereum Fund applications, respectively.

Impact on Ethereum Prices

The delay in Ethereum ETF approvals has weighed on Ethereum prices. The cryptocurrency fell 4.44% on the day the delay was announced, closing at $3365.4. The overall fluctuation in the day was approximately 9%.

Conclusion

The SEC's decision on Grayscale's Ethereum Futures ETF remains uncertain, with the extended deadline indicating a need for further review. The SEC's scrutiny of crypto ETFs, combined with the challenges faced by other asset management firms, suggests that the path to approval may be a bumpy one.