Published
2 years ago on
August 21, 2021
Table of Contents
- A Studied Silence
- A Wave Of Filings And Withdrawals
- False Hope For ETH
- 23 And Counting
- A Lenient World Market
- The Grayscale Ethereum Trust
A couple of days after they filed their paperwork for proposals for Ethereum futures, both VanEck and ProShares hastily withdrew their proposals. The firms sent the letters asking for the withdrawal on Friday, dampening the hopes for a crypto-ETF approval this year.
With both VanEck and ProShares withdrawing their applications, this also reduces any likelihood of other ETF launches in the US anytime this year.
A Studied Silence
Both VanEck and ProShares have maintained radio silence, choosing not to comment on the withdrawals or the circumstances leading to it. However, speculation is rife that the sudden and simultaneous withdrawal indicates that the Securities and Exchange Commission may have clearly indicated that it is unlikely to greenlight any futures-based Ethereum product in the near future.
A Wave Of Filings And Withdrawals
Over the past few years, there have been several other filings and withdrawals for other crypto ETFs, with issuers trying to modify their offerings to get the SEC’s approval. However, all efforts have not yielded any results so far, with the SEC sticking to its stand.
False Hope For ETH
Recently, The chairman of the SEC, Gary Gensler, hinted that the SEC might consider approving a futures-based Bitcoin ETF at some point in the near future. This announcement led to a surge in filings for those types of ETF products.
VanEck and ProShares had both hoped that the SEC’s softening of its stance towards a futures-based crypto ETF also extended to Ether. However, this was a miscalculation, and as a result, the filings had to be withdrawn after it became apparent that the SEC will not waver from its stance.
23 And Counting
With the filing of VanEck and ProShares, the total number of ETF filings for 2021 has crossed 23. While Bitcoin predates Ethereum by six years and has a highly established futures market, there is still no US-listed Bitcoin ETF.
At present, there are 17 bitcoin ETF filings in the pipeline, with 6 of them for futures-based products. After the VanEck and ProShares ETF filings withdrawal, there are three Ether ETF filings that are still pending.
A Lenient World Market
While the SEC is not granting any approvals to cryptocurrency ETFs so far, especially to Ether holding ETFs, regulators in other parts of the world have been significantly more lenient. Several Ether ETFs are already listed in Canada and Europe, examples of which are the $1.2 Billion Ether Tracker Euro-based in Sweden and the $510 Million CI Galaxy Ethereum ETF based in Canada.
The Grayscale Ethereum Trust
The Grayscale Ethereum Trust (ETHE) has over $9.5 Billion in assets, dwarfing all others. The ETHE is an over-the-counter product that has been quoted on QTCQX and is not an ETF but can be bought just like an ETF through a traditional brokerage account.
Despite its shortcomings, ETHE has been hugely successful thanks to the convenience it offers. Shortcomings such as the potential for large premiums and discounts which could leave a significant gap between the trusts’ net asset value and the share price. The ETHE has become the preferred way of purchasing Ether by US-based investors while US-listed Ether ETFs await approval.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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