Grayscale’s Ether Futures ETF Application Pulled, Reason Not Disclosed

A proposal to list and trade shares of prominent asset manager Grayscale's ether futures trading fund (ETF) has been withdrawn, according to a new document filed on Tuesday.

An SEC filing revealed that the application for the Grayscale Ethereum Futures Trust ETF, filed by NYSE Arca, Inc., has been withdrawn. In September last year, on May 3.

Previously, the agency had delayed consideration of Grayscale's Ethereum futures ETFs, most recently delaying in March.

However, the SEC approved a group of Ethereum futures ETFs in October 2023, including those from ProShares, VanEck, and Bitwise.

James Seyphart, a Bloomberg Fund analyst, was the first to do so Asher RIt's development. Initially, Seyphart believed that Grayscale had a strategic plan to use its futures ETF to influence the securities regulator to approve its spot ETH ETF.

He found it puzzling that Grayscale would withdraw its application, especially with the SEC scheduled to make a decision on at least one Ethereum ETF application on May 23, a little over two weeks away.

Seyfart, along with fellow analyst Eric Balchunas, had previously estimated a 25% chance of spot Ethereum ETFs being approved in May, down from 70% in January.

Even with Grayscale's withdrawal, Seyffart now sees the company as having no alternatives if the SEC doesn't approve its spot ETF.

“If you don't want to piss off the SEC. Withdrawals and redeposits are less work for the SEC. But at the same time, it means there's no way Grayscale or anyone can sue us now.”

However, comments made by SEC Chairman Gary Gensler in an interview with CNBC on May 7 Suggest The SEC is still deliberating on spot ETF applications.