Grayscale’s Chief Legal Officer, Craig Salm, is optimistic about the Securities and Exchange Commission’s (SEC) potential approval of Ethereum (ETH) exchange-traded funds (ETFs) by May 2024. Salm’s confidence is rooted in previous meetings between Grayscale and the SEC before the approval of Bitcoin ETFs. These discussions covered essential operational aspects such as creation and redemption procedures, contributions in cash or in-kind, authorized participants (APs), liquidity providers (LPs), and custody matters.
Salm argues that the case for Ethereum ETFs mirrors that of Bitcoin ETFs, as many previously resolved issues are directly applicable. The main difference between the two lies in their underlying assets.
He also cites the recent approval of Ether Futures ETFs, classified as commodity futures, as further support for a positive regulatory outcome. Salm highlights the high correlation between futures and spot products, strengthening the case for spot Ether ETF approval.
Additionally, Salm references industry insiders like Paul Grewal, Coinbase’s Chief Legal Officer, who have expressed similar sentiments regarding ETH’s regulatory status and the likelihood of approval.
However, Bloomberg ETF analysts Eric Balchunas and James Seyffart express reservations about the SEC’s level of engagement, lowering their expectations for an approved Ether ETF to 25%. Balchunas suggests that the SEC’s stance appears intentional rather than mere procrastination.
Currently, several entities, including BlackRock, VanEck, ARK 21Shares, Fidelity, Invesco Galaxy, Grayscale, Franklin Templeton, and Hashdex, have submitted ETF filings to the SEC. The deadline for VanEck’s application is May 23.