The U.S. Securities and Exchange Commission (SEC) postponed its decision regarding the application for a Grayscale Ethereum futures exchange-traded fund (ETF). Initially submitted in September by Grayscale Investments, this fund would enable investors to purchase shares based on the anticipated future value of Ethereum (ETH), which ranks as the second-largest digital asset by market capitalization.
The SEC has extended its decision-making timeframe, a common practice for the agency when evaluating cryptocurrency-related products. The SEC’s filing stated that the delay was to ensure adequate time for considering the proposed rule change and associated issues.
“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein,” the SEC wrote in its filing.
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More To ETFs
Grayscale Investments, a prominent digital asset manager, has also filed for an Ethereum futures ETF. This ETF focuses on Ethereum futures rather than direct transactions in Ether. This method doesn’t require holding Ether or appointing an Ether custodian. This move comes amidst several pending Bitcoin spot ETF applications, including submissions from major Wall Street firms like BlackRock.
An ETF is a well-known investment tool that mirrors the value of its underlying asset. There has been a longstanding demand for a Bitcoin ETF, but the SEC has consistently rejected these requests, primarily due to concerns over market manipulation.
The U.S. saw the first trading of Ethereum futures ETFs last month with ProShares, VanEck, Bitwise, Valkyrie, Kelly, and Volshares introducing a total of nine products on the Chicago Board Options Exchange (CBOE).
In another development, Grayscale has been in legal contention with the SEC regarding its application to convert its Grayscale Bitcoin Trust into an ETF. The firm sued the SEC in June after its application was denied, and in August, a judge ordered a review of the SEC’s decision, favoring Grayscale’s position. Grayscale also applied in October to convert its Ethereum trust into an ETF.
Bloomberg Intelligence analysts have since suggested that there is a high likelihood of the U.S. market introducing a Bitcoin ETF by January 10.
