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Grayscale CLO Allays Ethereum ETF Approval Concerns, Industry Worried Over SEC Engagement

Last Updated March 26, 2024 3:46 PM
Shraddha Sharma
Last Updated March 26, 2024 3:46 PM
By Shraddha Sharma
Verified by Peter Henn

Key Takeaways

  • Grayscale’s Craig Salm reassures on Ethereum ETF approval odds as the industry is concerned about lack of engagement.
  • Analysts have reduced Ethereum ETF approval odds to 25% from 35%.
  • Attention remains on the SEC’s guidance ahead of the May deadline as decisions see delays.

While there are growing concerns over the approval of an Ethereum Exchange-Traded Fund (ETF), Craig Salm, Chief Legal Officer at Grayscale, offered some reassurance. Salm touched upon the SEC’s engagement and the ETF prospects while analysts placed approval odds at 25%.

Meanwhile, eyes are fixed on the United States Securities and Exchange Commission (SEC) for guidance before the May deadline.

Grayscale CLO Addresses SEC Engagement Concerns

Grayscale CLO Craig Salm weighed  on the SEC’s decision on Ethereum ETFs and allayed concerns about the agency’s engagement this time around.

Salm highlighted the constructive engagement between Grayscale and the SEC in the months leading up to the approval of Bitcoin ETFs. The CLO emphasized that discussions with the SEC included various intricate details related to ETF creation, redemption procedures, custody, and other operational aspects.

He noted the similarities between Bitcoin and Ethereum ETFs. He also suggested previous engagements with the SEC already addressed many of the issues.

He said: “In many ways, the SEC already has engaged and issuers simply have less to engage on this time.”

The crypto community has been concerned about the perceived lack of SEC engagement in the approval process. However, Salm’s comments bring optimism as SEC action or inaction should not be interpreted as a negative indicator.

The Grayscale CLO shared the merits of approving Ethereum ETFs as consistency with Ethereum futures ETFs and the high correlation between futures and spot prices.

Ethereum ETF Approval Likelihood

Industry analysts previously expressed apprehensions about the prospects of Ethereum ETF approvals. With the absence of bullish indicators observed during Bitcoin ETF approval processes, Bloomberg analysts reduced the chances to 25% from its previous prediction of 35%.

Meanwhile, there has been a series of delays in ETF approvals. However, analysts indicate that the May 23 deadline remains significant. However, until then, there should be delays.

Meanwhile, Jan3 CEO Samson Mow believes  the SEC doesn’t want to open Pandora’s box. This would require it to approve other ETFs for potential securities, or coins that have no real value. According to Mow, ETH is a security.

ETH ETF Incoming?

Debate surrounding Ethereum ETF approvals has intensified ahead of its May deadline. Further developments from the SEC are awaited even if the community thinks that it has done most of the weightlifting during the Bitcoin ETF approval process. While Craig Salm’s remarks offer hope, the fate of Ethereum ETFs hangs in the balance with lower odds.

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