- Grayscale wants to convert its Ethereum Trust into a spot Ethereum ETF
- SEC has been adamant about approving similar products involving Bitcoin
Crypto asset manager Grayscale has filed with the U.S. SEC to convert Grayscale Ethereum Trust (ETHE) to a spot Ethereum ETF. The spot ETF will invest in the Ethereum asset compared to the existing trust invested in Ether futures.
Grayscale’s Ethereum Trust is the world’s largest ether investment product, valued at $4.9 billion. The assets comprise 2.5% of the ETH in supply.
CEO Michael Sonnenshein said the filing underlines Grayscale’s commitment to offer conventional investment products with exposure to digital assets. Sonnenshein added,
“As we file to convert ETHE to an ETF, the natural next step in the product’s evolution, we recognize this as an important moment to bring Ethereum even further into the U.S. regulatory perimeter.”
Moving Away from Bitcoin to Spot Ethereum ETF?
The latest application comes even as the SEC delays approvals for a spot Bitcoin ETF. In 2021, the asset manager unsuccessfully applied to convert Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
In August 2023, Grayscale scored a major victory in U.S. court against SEC. According to the District of Columbia Court of Appeals, the regulator had no grounds to deny Grayscale’s spot Bitcoin ETF.
SEC has been adamant that a spot Bitcoin ETF carries a high risk of fraud and manipulation. The U.S. regulator has rejected spot Bitcoin ETF applications from VanEck, Fidelity, and Wisdom Tree.
Given the SEC’s earlier pronouncements, it remains to be seen if the regulator will approve the spot Ethereum ETF from Grayscale.
