Grayscale Investments has surprised the market by withdrawing its application for an Ethereum Futures ETF just weeks before the SEC’s decision deadline. This move suggests a potential change in strategy, as Grayscale now appears to be focusing on pursuing an XRP ETF instead.
Grayscale initially applied for the Ethereum Futures Trust ETF on September 19, 2023. The ETF was intended to be listed on NYSE Arca, pending approval from the SEC. However, on May 7, 2024, Grayscale filed a withdrawal notice with the SEC, indicating that it has abandoned its pursuit of an Ethereum futures ETF, at least for the time being.
The journey of the Ethereum Futures ETF application began on September 19, 2023, when Grayscale filed its 19b-4 application. This sparked interest from investors and regulators, as it presented a new opportunity to engage with Ethereum through a regulated, futures-based product. After a period of consideration, the final decision was scheduled for May 30, 2024.
However, on May 3, 2024, Grayscale decided to retract its filing and withdraw from the process entirely. The reasons behind this decision remain unclear, especially given the proximity to the SEC’s final ruling date. Some analysts, like James Seyffart from Bloomberg, initially speculated that the ETF could have been a strategic asset to leverage approval for a spot Ether ETF.
Grayscale’s unexpected withdrawal comes at a time when the SEC is deliberating on various cryptocurrency ETFs, including several applications for spot Ether ETFs that are due for a final decision in late May 2024. Seyffart expressed confusion over Grayscale’s strategic pullback, particularly as it coincides with critical SEC decision timelines for other cryptocurrency funds.
This move by Grayscale to withdraw its Ethereum Futures ETF application suggests a potential shift in strategy for the digital asset manager. While the exact reasons behind this decision are unclear, there are speculations that Grayscale may now focus on other cryptocurrency-related products, such as an XRP-based ETF.
Sources familiar with the matter indicate that Grayscale has already started the application process for an XRP ETF, aiming to capitalize on the growing interest and adoption of the XRP Ledger and its native token. The XRP Ledger’s scalability and low transaction fees have long been considered potential advantages over other blockchain networks. If Grayscale’s XRP ETF receives regulatory approval, it could lead to increased institutional investment and mainstream adoption of the XRP token.