News & Analyses

Ethereum ETF issuers not giving up fight, expert says as Grayscale files S3 prospectus

  • Grayscale has filed their S3 prospectus to convert their Ethereum Trust to an Ether ETF.
  • BlackRock has filed an amendment to their 19b-4 ETH ETF application.
  • Experts anticipate approval by May 23 despite expected delay in Grayscale and Franklin Templeton applications.

Ethereum exchange-traded funds (ETFs) theme gained steam after the landmark approval of multiple BTC ETFs in January. However, the campaign for approval of this investment alternative continues, with evidence of ongoing back and forth between prospective issuers and the US Securities and Exchange Commission (SEC).

Also Read: Ethereum Foundation subpoena threatens ETH ETF approval odds

Grayscale files S3 prospectus

The US SEC delayed a decision in the filings by American digital currency asset management company Grayscale as well as that of globally renowned holding company Franklin Templeton. However, this has not derailed Grayscale from the fight, as reports indicate it has filed its S3 prospectus to have its Ethereum Trust (ETHE) converted to a spot ETH ETF.

An S-3 prospectus allows ETF issuers to register additional securities or create new ETF products without having to provide as much detailed information as required in the initial S-1 registration statement.

Grayscale, which manages up to $10.87 billion in assets in its Ethereum Trust (ETHE), recently amended its filing for a Spot Ethereum ETF. The asset manager announced that it filed an amendment and took an important step to uplift ETHE to the NYSE Arca. 

The push by Grayscale sprouts from the belief that investors deserve access to Ethereum in the form of a Spot Ether ETF. This explains why the asset manager builds a strong case for the same, just as it did for Spot Bitcoin ETFs. 

With the SEC leaving the two investments firms hanging, it has pushed the decision to a later date on June 11, 2024. The two entities, top fund managers in their own right, are pursuing approval from the SEC to launch investment vehicles that would trade on American stock exchanges, tracking the price of Ethereum.

Citing the SEC:

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.

Other applicants who are also enduring delays include VanEck and BlackRock. As a side note, Grayscale has also filed for an Ethereum Mini Trust.

Grayscale has since responded to the SEC’s delay, saying, “We believe the case for spot Ethereum ETFs is just as strong as it was for spot Bitcoin ETFs. Today we submitted new regulatory filings that would further expand our product suite.

BlackRock files amendment to their 19b-4 ETH ETF application

Meanwhile, BlackRock is also not giving up its fight, as seen with the American investment firm filing an amendment to their 19b-4 ETH ETF application. ETF analyst from Bloomberg Intelligence James Seyffart says that while the iShares amendment is interesting, the likelihood that it would expedite an approval is slim to none, adding that the May 23 approval date estimation of 25% remains unchanged. Initially, it was as high as 70%.

The specialists expectation of an approval is not as ambitious as it was during the spot BTC ETF campaign considering the SEC has not really engaged with issuers on Ethereum specifics. This is the exact opposite of what happened during the BTC ETFs campaign.

Despite hopes for Ethereum ETF approvals, industry analysts, including JP Morgan, suggest that the chances of approval by the May deadline are uncertain, with estimates of no more than a 50% likelihood.

Another analyst from market-making firm GSR, Brian Rudick, stated that the company had lowered its prediction of a spot Ethereum ETF approval chance to 20% from the 75% optimistic prediction it gave in January.

On today’s delays, ETF specialist Eric Balchunas says it “looks like a final nudge to try and get the SEC’s attention, although most likely in vain,” adding that the same pessimism they had then is the same they have now.

Source link

News & Analyses Analyses