Grayscale CLO on U.S. SEC Approval for Ethereum ETF

Insights shared by Grayscale Chief Legal Officer regarding the potential approval of spot Ethereum ETF by the U.S. SEC.

Grayscale Investments Chief Legal Officer, Craig Salm, recently engaged in a discussion on the social media platform X, expressing his optimism regarding the approval of spot Ethereum ETFs in the U.S. Salm highlighted the viability of these ETFs and the necessity for their approval. He referred to past interactions between Grayscale and the SEC during the approval process for Bitcoin ETFs, focusing on operational aspects such as creation and redemption procedures.

Salm drew parallels between the approved spot Bitcoin ETFs and the proposed spot Ethereum ETFs, emphasizing similarities in fundamental processes. He argued that previous engagement with the SEC on similar grounds suggests less necessity for engagement this time.

As the decision deadline approaches in late May 2024, Salm expressed confidence that the perceived lack of SEC interaction does not necessarily indicate the outcome of the spot Ethereum ETF applications.

He cited opinions from industry leaders like Paul Grewal of Coinbase and Brian Quintenz of a16z Crypto, who see reasons for approval based on consistency with ETH futures ETFs and the classification of ETH futures as commodity futures. Salm reiterated the demand among investors for accessible spot Ethereum ETFs and Grayscale’s commitment to advocating for these products.

Following Salm’s remarks, Eric Balchunas, a Senior ETF Analyst at Bloomberg, offered a contrasting viewpoint, expressing skepticism about the SEC’s likelihood of approving any spot Ethereum ETF in May 2024.

Balchunas estimated the chances at a “very pessimistic” 25%, attributing the lack of SEC engagement to a deliberate stance rather than delay. Despite personal hopes for approval, Balchunas’ analysis presents a cautious outlook for the immediate future of Ethereum ETFs.

At the time of reporting, Ethereum is trading at around $3,629, reflecting a 5.1% increase in the past 24-hour period.

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