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Grayscale Decided to Drop Ethereum ETF Plans: Here's Why

Thu, 05/18/2023 - 13:06
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Arman Shirinyan
Two digital asset giants are dropping their fundamental plans as no regulatory clarity provided since 2021
Grayscale Decided to Drop Ethereum ETF Plans: Here's Why
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Surprisingly, two leading asset managers, Grayscale Investments and Bitwise, have seemingly backpedaled on their plans to launch Ether-futures Exchange Traded Funds (ETFs), Bloomberg reports.

Grayscale has expunged the mention of the Ethereum Futures ETF from its filing, retaining only two separate funds, while Bitwise has formally withdrawn its application for its Ethereum Strategy fund, according to documents submitted to the U.S. Securities and Exchange Commission. These unexpected alterations were first reported by Blockworks. As of now, Grayscale, Bitwise and the SEC have remained tight-lipped about these changes.

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These developments could be attributed to a combination of factors. First and foremost, the overarching regulatory environment could have played a crucial role. The SEC has repeatedly denied approvals for Bitcoin and Ethereum ETFs from various financial institutions, raising the regulatory bar for such products.

Despite the potential of these ETFs to catapult these asset management giants back to market prominence, the risk associated with regulatory uncertainties may have been a deterrent effect. Grayscale and Bitwise might have decided to sidestep potential regulatory hurdles by abandoning their Ether-futures ETF plans.

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Furthermore, the recent liquidity crisis faced by Glassnode might have induced a cautionary stance in these asset managers. Faced with the prospect of similar liquidity issues, both Grayscale and Bitwise could have deemed it prudent to pull back on their Ether-futures ETFs.

While the precise reasons for these shifts remain speculative, the recent developments underscore the complexity and challenges of navigating the crypto asset management space amid regulatory uncertainties and market volatility. As the landscape continues to evolve, firms will need to remain flexible and responsive to shifting trends and regulations.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.