Grayscale withdraws its Ethereum Futures ETF application

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Grayscale has made a surprising move to withdraw its 19b-4 application for its Ether (ETH) futures exchange-traded fund, just three weeks before the securities regulator would be forced to make a decision on it.

The cryptocurrency asset manager filed a notice of withdraw the Grayscale Ethereum Futures Trust with the United States Securities and Exchange Commission on May 7.

The SEC was scheduled to make a final decision on Grayscale’s Ether futures ETF on May 30.

Grayscale initially filed its 19b-4 application for its Ether futures ETF on Sept. 19, 2023, which would have been listed on the New York Stock Exchange, had it been approved.

Bloomberg ETF analyst James Seyffart initially believed that Grayscale planned to strategically use its Ether futures ETF as a “trojan horse” to corner the SEC into approving its spot Ether ETF.

But he expressed confusion as to why Grayscale would withdraw now, when the SEC will be forced to make a decision to approve or deny several at least one spot Ether ETF application on May 23, a little over two weeks away.

Related: SEC will classify Ether as security, deny spot Ether ETFs — Michael Saylor

For several months, Seyffart and fellow Bloomberg ETF analyst Eric Balchunas have held a 25% chance the spot Ether ETFs will be approved on May 23, down from 70% in January.

However, comments from SEC Chair Gary Gensler in a May 7 interview with CNBC suggest the SEC is still weighing up its decision on the spot Ether ETFs.

“That’s something in front of our Commission right now, we’re a five-member Commission, and those filings will take up at the appropriate time.”

The SEC must make its decision on the VanEck’s application on May 23, while ARK 21Shares and Hashdex have final deadlines on May 24 and May 30.

Deadlines for the spot Ether ETF applications before the SEC. Source: James Seyffart

Applications from Grayscale, Invesco Galaxy, BlackRock and Fidelity must be made in June, July and August. However many industry pundits expect the securities regulator to make a decision on all or most applicants in the same way it did with the spot Bitcoin ETFs in January.

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