Only mere weeks after Bitcoin ETFs were approved to be listed on US securities exchanges, asset management companies are now seeking the approval of Ethereum ETFs.
However, Grayscale and BlackRock’s application for an ETH ETF have been halted by the US Securities and Exchange Commission (SEC).
An SEC filing regarding Grayscale’s application to launch its Ethereum Trust Product outlined the nature of the application and its place in the securities market.
According to the filing, Grayscale’s Ethereum Trust Product solely consists of the cryptocurrency and its price will be reflective of the value held by the asset management firm.
The filing further revealed: “The Commission is instituting to determine whether the proposed rule change should be approved or disapproved.
“Institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change.
“Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, the Commission seeks and encourages interested persons to provide comments on the proposed rule change.”
Similar to Grayscale and BlackRock’s applications for a Bitcoin ETF, the SEC will almost certainly mull over the facets of an ETH ETF to the fullest extent possible, as it remained persistent on preventing a Bitcoin ETF from ever happening.
Commenters, much like during the process for the Bitcoin ETF, will be instructed to provide document updates that address the various risks associated with a spot ETH ETF if it reaches this stage.
Whilst the Bitcoin ETF approval became a benchmark moment for mainstream crypto adoption, an ETH ETF would raise this ceiling further by providing more optionality.
Recently, BlackRock CEO Larry Fink suggested that an ETF for the second largest cryptocurrency would signify his vision to help tokenise every financial asset in the near future.