Grayscale's Ethereum Futures ETF Delayed Again: What's the Hold-Up?

The SEC has delayed its decision on Grayscale's Ethereum Futures ETF once again, pushing back the deadline to May 30, 2024. This hold-up has not surprised analysts, with Bloomberg's ETF expert, James Seyffart, seeing it as part of Grayscale's strategic plan to eventually secure approval for its spot ETH ETF.

Grayscale's Ethereum Futures ETF: What's the Latest?

The SEC has pushed back the deadline for its decision on Grayscale's Ethereum Futures ETF, once again. What's the hold-up?

SEC Extends Deadline for Decision

The SEC has extended the deadline to May 30, 2024, to decide on Grayscale's ETF. This gives the agency more time to "consider the proposed rule change and the issues raised therein."

Analysts Not Surprised

Bloomberg ETF analyst James Seyffart isn't shocked by the delay. He believes it's part of a larger strategy by Grayscale to eventually get approval for its spot ETH ETF.

Spot ETH ETF Approval Unlikely

Galaxy Digital's Alex Thorn doesn't think approval of spot ETH ETFs is likely right now. He cites the SEC's subpoenas to crypto companies and lack of communication with ETF issuers as reasons for his pessimism.

SEC's Investigation of Ethereum ICO

The SEC is reportedly investigating whether the Ethereum ICO was an unregistered securities offering. This could have implications for the approval of ETH ETFs, according to Thorn.

SEC's Communication Deficit

Thorn also notes that the SEC is not actively communicating with ETF applicants. This, combined with the investigation into the Ethereum ICO, makes May approval seem unlikely.

What's Next?

The SEC's investigation and lack of communication raise questions about the future of spot ETH ETFs. Grayscale's revised 19b-4 form may force the regulator's hand, but the odds of approval remain slim.

Implications for Grayscale

The delays and uncertainty surrounding the Ethereum Futures ETF could have significant implications for Grayscale. The company is facing competition from other ETF issuers and its investors are eager for approval of a spot ETH product.

Industry Impact

The SEC's actions have broader implications for the crypto industry. The investigation into the Ethereum ICO could set a precedent for how the agency regulates other cryptocurrencies.

Conclusion

The SEC's extended deadline for Grayscale's Ethereum Futures ETF adds to the uncertainty surrounding spot ETH ETFs. The agency's investigation into the Ethereum ICO and lack of communication with ETF issuers suggest that approval is unlikely in May. Grayscale and the crypto industry will continue to watch developments closely.