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Grayscale to Focus Energies on Ethereum Spot Products, Says CEO – DL News

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  • Grayscale Investments has withdrawn its request to provide an Ethereum futures ETF.
  • Michael Sonneshein, CEO of Grayscale, expressed optimism that the SEC will approve the company’s application to convert its Ethereum trust into a spot ETF.

Grayscale Investments will focus on converting its Ethereum trust — the world’s largest — into spot exchange-traded products, CEO Michael Sonnenshein said Wednesday.

“At Grayscale, we decided to focus our energy on our spot products. It’s really at the heart of our DNA,” he said at an event in London organized by the Financial time.

Tuesday, the media reported that the crypto-native asset manager had withdrawn its application to the Securities and Exchange Commission to provide an Ether futures ETF.

She filed the request in October.

Sonnenshein said the asset manager was withdrawing its request because a number of futures products are already available to investors.

As DL News reportedVanEck’s EFUT and ProShares’ EETH dominate the extremely competitive Ethereum ETF field, accounting for over 90% of total trading volume at launch.

“Sometimes we submit a product request. That doesn’t necessarily mean it will be commercialized,” Sonnenshein said.

All eyes on Ether ETFs

Grayscale paved the way for the approval of Bitcoin spot ETFs by winning an SEC case that allowed it to convert its Bitcoin Trust into an ETF.

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The SEC accepted Grayscale’s request — along with those of 10 others from various asset managers, including BlackRock and Fidelity Investments — in January.

Since the runaway success of these funds, which saw nearly $12 billion in net inflows, attention has turned to the approval of Ethereum spot products.

Grayscale, along with BlackRock, VanEck, ARK Invest, Fidelity, Invesco and Hashdex, have filed to convert their Ethereum trust into a spot ETF.

The industry will know what the SEC thinks when the regulator makes a decision on the first request, VanEck’s, on May 23.

Mini Trust

Grayscale has also applied for a mini-trust – a smaller fund funded by assets from a larger trust.

Craig Salm, General Counsel at Grayscale, said The Grayscale Ethereum Mini Trust aims to complement the rest of the company’s Ethereum-based product line to support a range of investors.

The mini-trust “would launch as a low-fee alternative Ethereum spot ETF and is designed for investors interested in optimizing their Ethereum ETF investment for a “buy and hold” strategy in their brokerage or holding account. retirement, for example,” Salm said. .

Analysts are not optimistic about the chances of the SEC approving any of the Ether spot product applications.

On the one hand, the regulatory status of Ethereum is not clearly defined. SEC Chairman Gary Gensler has remained evasive on whether Ethereum is a security.

Additionally, Gensler suffered political setback from anti-crypto politicians in the Biden administration after the SEC approved spot Bitcoin ETFs – although, arguably, the agency had no choice after losing in court to Grayscale.

On Wednesday, Sonnenshein said that while it’s unclear what the SEC thinks about Ethereum, Grayscale is “optimistic that the SEC will do the right thing for investors.”

He added that “Grayscale Ethereum Trust is already an SEC reporting company. We file the 10-K and 10-Q [disclosures to the SEC]and we have always been a company that pushes our regulators to allow crypto to be brought further and further into the regulatory scope.

Contact the author at joanna@dlnews.com.

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