Grayscale Exudes Confidence in SEC Approval for Spot Ethereum ETFs

Grayscale expresses confidence in the potential approval of spot Ethereum exchange-traded funds (ETFs) by U.S. regulators in May, despite recent uncertainties surrounding the Securities and Exchange Commission’s (SEC) engagement with applicants.

Craig Salm, Chief Legal Officer at Grayscale, shared the firm’s positive outlook through a thread on X, addressing concerns regarding the perceived lack of SEC engagement with Ethereum ETF applicants.

Similarities and Caution: Comparing Approval Processes for Bitcoin and Ethereum ETFs

Salm highlighted the similarities between the approval process for spot Bitcoin ETFs and their Ethereum counterparts, noting that critical issues had already been discussed with the SEC during the approval of the BTC batch. He emphasized that the operational fundamentals of ETFs remain consistent, with the primary distinction being the underlying asset.

Addressing concerns over perceived regulatory disengagement, Salm cautioned against interpreting it as indicative of the approval outcome. He emphasized that opinions on the SEC’s engagement should not sway expectations as approval dates approach.

Differing Views: Grayscale's Optimism vs. Bloomberg Analysts' Pessimism on Ethereum ETF Approval

Grayscale's optimism contrasts with the revised odds by Bloomberg ETF analysts Eric Balchunas and James Seyffart, who express pessimism about spot Ethereum approval, lowering the odds to 25%. Balchunas raised concerns over the apparent lack of SEC engagement, suggesting a purposeful stance rather than mere procrastination.

The SEC's probe into the Ethereum Foundation has sparked fears of a coordinated attack on Ethereum, potentially affecting spot ETH ETF approvals. However, figures like Coinbase’s chief legal officer, Paul Grewal, and Travis Kling, chief investment officer of Ikigai Asset Management, argue against this sentiment, stating that the SEC lacks sufficient grounds to deny ETH ETP applications.

Despite the uncertainties, firms like BlackRock, VanEck, Fidelity, and Grayscale persist in their spot Ethereum ETF applications. The SEC is expected to decide on VanEck’s application by May 23, with all applicants anticipating their fate on that date.