Grayscale Enhances Ethereum ETF Filing

Grayscale’s Chief Legal Officer highlights the appeal of Ethereum ETFs and compares them to Bitcoin ETFs.

Grayscale has amended a regulatory filing detailing its plans to transform Ethereum Trust into a spot exchange-traded fund (ETF).

The amendment filed by the company on March 15 enhances its initial filing in numerous aspects. The update supports the claim that the level of surveillance sharing implemented in the CME ETH market is adequate to safeguard against manipulation and fraud on the spot ETH market.

Coinbase’s correlation analysis is cited in the most recent amendment to Grayscale as proof of adequate market correlation. Since approximately three years ago, the CME ETH futures market has been “consistently and highly correlated” with the spot Ethereum market, according to Coinbase.

The rate exceeds the correlation between the CME Bitcoin futures market and the spot Bitcoin market that the SEC discovered.

Additionally, the amendment by the company clarifies the issuance and redemption of ETF shares. Notably, only currency creations and redemptions are described in this section. Consequently, it specifies that ETH cannot be purchased, held, delivered, or received by authorized parties.

Grayscale’s Growing AUM and Regulatory Hurdles

The filing indicates that Grayscale Ethereum Trust has increased its assets under management (AUM) from $4.8 billion to $11.8 billion. The value could be unlocked by converting the fund to an ETF, which is $1.73 billion as opposed to the $1.6 billion that was initially estimated.

The Chief Legal Officer of the company, Craig Salm, acknowledged the filing and emphasized the anticipated wide-ranging appeal of spot Ethereum ETFs. Investors “deserve and desire access to Ethereum in the guise of a spot Ethereum ETF,” he wrote on X.

The case for an Ethereum ETF, according to Salm, “is equally as robust as it was for spot Bitcoin ETFs.”

Methods of creation and redemption on the market and market manipulation were significant concerns before the January approval of spot Bitcoin ETFs. The most recent amendment by the company is crucial because it addresses the same problems regarding Ethereum ETFs.

The amendment proposed by the company coincides with a decrease in anticipated regulatory approval. As of March 15, Polymarket estimates the likelihood of Ethereum ETF approval by the end of May is a mere 26%.