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Grayscale’s New Ether Future ETF: Latest Firm Chasing Ethereum ETFs

Published September 20, 2023 4:52 PM
Omar Elorfaly
Published September 20, 2023 4:52 PM

Key Takeaways

  • Grayscale wants to list and trade shares of the Grayscale Ethereum Futures Trust.
  • The trust will hold futures contracts with a “roughly constant expiration profile”.
  • Grayscale joins a list of asset managers, such as Valkyrie, filing for Ether Futures, banking on the recent SEC-related triumph.

Digital asset manager Grayscale has been celebrating its recent win against the US Securities and Exchange Commission (SEC), as a US District judge ruled that the commission’s actions were deemed ‘arbitrary and capricious’.

Now, while waiting for its Bitcoin spot ETF approval from the SEC, Grayscale is filing  for Ethereum Futures Trust (ETH) ETF under the New York Stock Exchange (NYSE).

Grayscale Ethereum ETF

The digital asset manager joins several Wall Street firms, such as Valkyrie, in listing shares based on Ethereum investing. A recent report  shows that the SEC would allow the first ETFs based on Ether futures, inducing hype into the Ethereum market.

Grayscale Advisors – which manage the ETF . are referred to as the “sponsor” in the company’s filing, as the proposal is pursuant to the provisions of the Securities Exchange Act of 1934 and rule change submitted by NYSE to the SEC.

“The Sponsor is in the process of becoming registered as a commodity pool operator with the Commodity Futures Trading Commission and is in the process of becoming a member of the National Futures Association,” reads Grayscale’s filing.

The document also mentions that The Grayscale Ethereum Futures Trust will keep its holdings in Ether futures contracts with a “roughly constant expiration profile,” and that it will “never carry futures positions all the way to cash settlement.”

The trust plans to initiate an open position in futures contracts by depositing an initial margin amount. This margin deposit serves a similar function to a cash performance bond, providing assurance of the trader’s commitment to fulfilling the purchased or sold futures contracts.

Grayscale Tips The Scale

Following a partial win gained by Ripple over the case in which the SEC claims the company traded in unregistered securities, Grayscale’s triumph over the commission solidified the belief that the SEC may actually lose in court if it’s truly at fault.

Now, Grayscale is reaping the full extent of its triumph by hedging its bets on both Bitcoin and Ethereum. Grayscale even said it won’t refile its Bitcoin spot ETF application as it sees its current application as sufficient.

And, according to an analyst, now is definitely the time to start investing in Ethereum, which is exactly how Grayscale aims to expand its business.

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