Grayscale Submits Application for New Ether Futures ETF: Official Filing

Digital asset investment company Grayscale has taken a significant step in the evolving world of cryptocurrency investments by submitting a formal application for a new Ethereum futures exchange-traded fund (ETF) to the Securities and Exchange Commission (SEC).

On September 19th, Grayscale made the official proposal to list and trade shares of the Grayscale Ethereum Futures Trust (ETH) ETF on the New York Stock Exchange (NYSE) Arca under Rule 8.200-E. This move aligns with the regulations outlined in the Securities Exchange Act of 1934 and is backed by a rule change submitted by NYSE to the SEC. Grayscale Advisors, often referred to as the “sponsor” in the filing, will oversee the ETF’s management.

As outlined in the document, Grayscale Advisors is in the process of registering as a commodity pool operator with the Commodity Futures Trading Commission (CFTC) and becoming a member of the National Futures Association. The firm has also enlisted the services of Videnct Advisory as a subadviser, responsible for acting as the trust’s commodity trading adviser.

The primary objective of the Grayscale Ethereum Futures Trust is to maintain its holdings in Ether futures contracts with a consistent expiration profile. Notably, the trust will not hold futures positions until they reach cash settlement.

Unlike some other crypto investment vehicles, this ETF will not require an Ether custodian for managing the Ethereum futures contracts. Instead, the trust will establish an initial margin deposit to initiate open positions in futures contracts, which functions as a cash performance bond. This deposit serves as a guarantee of the trader’s commitment to fulfilling the futures contracts they purchase or sell.

This development follows closely on the heels of Valkyrie, a digital asset management firm, filing for its own Ether futures ETF with the SEC in mid-August. In fact, a growing number of companies have recently submitted applications for Ethereum futures ETFs, with the SEC signaling its willingness to allow the creation of these investment products on August 17th. This news has generated considerable optimism within the Ethereum market.

It’s worth noting that Grayscale achieved a significant, albeit partial, victory against the SEC the previous month. In its efforts to transform the Grayscale Bitcoin Trust (GBTC) from an over-the-counter product into a listed Bitcoin exchange-traded fund (ETF), the SEC initially rejected the application. In response, Grayscale initiated legal action, leading to an appeals court ordering a review of Grayscale’s petition and the vacating of the SEC’s order to deny the GBTC listing application. While this doesn’t guarantee the eventual listing of a Grayscale spot Bitcoin ETF, it has been met with enthusiasm within the crypto community.

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