Analyzing the Potential Impact of Grayscale ETH Futures ETF on Spot Ethereum ETF

Grayscale’s ETF Application as a “Trojan Horse”

The crypto sentiment analysis of Bloomberg ETF analyst James Seyffart is that Grayscale Investments is using their Ether (ETH) futures exchange-traded fund (ETF) application as a “trojan horse” to corner the United States Securities and Exchange Commission into approving its spot Ether ETF.

Seyffart expressed his opinion in a Nov. 15 Twitter post that if the SEC approves Grayscale’s application, then it would enable them to argue for the approval of its spot Ether ETF application. He added that if the SEC denies Grayscale’s bid, the asset manager could argue the SEC is treating Bitcoin (BTC) and Ether futures ETFs differently.

The crypto right now is that Grayscale’s Ether futures ETF bid was submitted via a form 19b-4 — which exchanges file to inform the SEC of a security-based swap request. Seyffart noted that none of the 40 or so approved Ether ETF products went through the 19b-4 approval process.

Grayscale’s Ether Futures ETF

At first, Seyffart was uncertain why Grayscale opted to file its Ether futures ETF via a 19b-4. Now, he believes Grayscale is strategically using the Ether Futures ETF as a “trojan horse” to force the SEC into a lose-lose situation.

Seyffart and Scott Johnsson, General President at Van Buren Capital General, both agreed that Grayscale would not launch the Ether futures ETF. Johnsson commented that it is “doubtful this product ever trades, but useful as a vessel to get spot ETH over the finish line.”

The SEC delayed its decision on Grayscale’s Ether futures ETF on Nov. 15, two days before the Nov. 17 deadline. Seyffart wasn’t surprised by the crypto sentiment analysis delay.

The US Securities and Exchange Commission (SEC) postponed Hashdex’s initiative to transform its Bitcoin futures exchange-traded fund (ETF) into a spot product on Nov. 15. Last week, BlackRock also expressed a similar sentiment to Seyffart, claiming that there is no valid rationale for the SEC to treat cryptocurrency spot and futures ETF applications differently.

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