Crypto Asset Manager Grayscale Files for New Ethereum Futures ETF: WSJ

On Sep­tem­ber 19, Grayscale Invest­ments filed with the Secu­ri­ties and Exchange Com­mis­sion for a new ETF track­ing Ethereum futures.

The firm has filed under both secu­ri­ties acts, the Secu­ri­ties Act of 1933 and the Invest­ment Com­pa­ny Act of 1940, report­ed the WSJ.

This is worth not­ing because the SEC has approved Bit­coin futures ETFs reg­is­tered under both acts.

More­over, around a dozen finan­cial firms besides Grayscale have filed for ETH futures-relat­ed ETFs under the lat­ter act, which could be approved in October.

Ethereum ETF Flurry

Grayscale’s lat­est fil­ing fol­lows a court rul­ing that the SEC should not have denied its appli­ca­tion to con­vert its Bit­coin Trust (GBTC) into a spot Bit­coin ETF.

Volatil­i­ty Shares, Bit­wise, ProShares, VanEck, Round­hill, and Valkyrie Invest­ments have all applied for Ethereum futures ETFs in recent weeks.

The most recent fil­ing came on Sept. 13, when Nasdaq’s Hashdex joined the race with the Hashdex Nas­daq Ethereum ETF. The fund is designed to include a com­bi­na­tion of spot ETH hold­ings and futures con­tracts in its portfolio.

Ear­li­er this month, Ark Invest and 21Shares sub­mit­ted appli­ca­tions for spot Ethereum ETFs. How­ev­er, the SEC has yet to approve any spot cryp­to exchange-trad­ed prod­uct, cit­ing mar­ket manip­u­la­tion and volatility.

Grayscale’s GBTC fund is cur­rent­ly trad­ing at a dis­count of 20.3%, accord­ing to Ycharts. The dis­count to net asset val­ue dropped as low as ‑50% fol­low­ing the col­lapse of FTX late last year.

Grayscale on Fed Meeting

On Sept. 19, Grayscale pub­lished a mar­ket update detail­ing its thoughts on US mon­e­tary policy.

The FOMC is expect­ed to release guid­ance on rates for Q3 today. What could it spell for dig­i­tal assets? Read our lat­est Mar­ket Byte for analy­sis: https://t.co/cMxHxUknVk pic.twitter.com/9XiSzhFQNJ

— Grayscale (@Grayscale) Sep­tem­ber 19, 2023

The Fed­er­al Reserve will meet on Sept. 20 to dis­cuss rate hikes and fis­cal pol­i­cy going into the last quar­ter. Grayscale ana­lysts were con­fi­dent that the out­come will be pos­i­tive for cryp­to markets.

“We expect that the Fed­er­al Reserve will sig­nal either that it has fin­ished rais­ing rates or that it will be fin­ished after one more increase in Q4. That guid­ance will like­ly dri­ve cryp­to and tra­di­tion­al assets over the very short run.”

They said that whether the Fed hikes one more time or not may be less impor­tant for cryp­to than the fact that the broad­er tight­en­ing cycle is com­ing to an end. “Fed tight­en­ing has weighed on val­u­a­tions, and its con­clu­sion could help sup­port an even­tu­al recov­ery,” said the analysts.