SEC Delays Grayscale Ether ETF Decision

As anticipation builds for cryptocurrency exchange-traded funds, the Securities and Exchange Commission has delayed approval of Grayscale Investments' spot ether ETF, pushing the next deadline to early next year.  

The SEC pushed back its decision until mid-January, according to a filing released Dec. 5. In mid-November, the agency punted on Grayscale’s request to launch an ether futures ETF. Grayscale filed to convert its Grayscale Ether Trust into an ETF in early October as part of the company’s push to build a line of spot digital-asset ETFs. 

“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein,” the SEC’s notice said. 

While the SEC has allowed ETFs that track bitcoin and ether futures, the agency has thus far delayed and blocked all bids for spot ETF applications—much to the frustration of the industry and investors. The agency is considering about a dozen spot bitcoin filings from firms such as BlackRock Inc. and Fidelity Investments.  

A turning point in the bid for a spot bitcoin ETF came when Grayscale won a watershed lawsuit against the SEC in late August, in which the U.S. Court of Appeals ruled unanimously that the agency was wrong to block Grayscale’s application to cinvert its bitcoin trust product into an ETF.  

Grayscale Spot Bitcoin ETF 

Yet when the SEC will finally greenlight Grayscale’s spot ether ETF remains unclear. The company has been working with the SEC to refine its filing to convert its Grayscale Bitcoin Trust (GBTC). A bunch of applications are in the final stages, according to Reuters. 

The GBTC discount, which is one measure used to gauge investor sentiment about a spot bitcoin ETF approval, is hovering at about 11%.  

Contact Lucy Brewster at [email protected].