The US Securities and Exchange Commission (SEC) has acknowledged Grayscale Investments’ application to transform its Grayscale Ethereum Trust (ETHE) into a spot Ethereum exchange-traded fund (ETF).
This was confirmed by Nate Geraci, president of The ETF Store. The proposed conversion of the $4.8 billion ETHE trust into an SEC-registered ETF could offer a pathway for mainstream investors to access Ethereum’s native token, Ether, without directly holding cryptocurrencies. Currently, ETHE is traded over the counter as a private trust.
An SEC filing reveals that NYSE Arca, the platform set to list the proposed ETF, submitted the application for Grayscale’s spot Ether ETF on October 2. The goal is to convert Grayscale’s existing Ethereum trust into an ETF that directly holds Ether, as opposed to using futures contracts.
This development follows the SEC’s approval of several Bitcoin futures ETFs in 2021 and more recently, Ethereum futures ETFs. However, the SEC has not yet given the green light to any spot crypto ETFs that hold digital assets directly.
The crypto community hopes that transforming existing trusts like ETHE into SEC-registered ETFs will broaden digital asset investment opportunities for a wider range of investors. While ETFs face more stringent regulations compared to trusts, they are generally more accessible for both retail and institutional investors.
The SEC will now commence a formal review process for Grayscale’s Ethereum ETF application, and a final decision is expected to take several months. This decision holds significance for crypto investors as it could shape the trajectory of digital assets moving further into the investment mainstream.