Digital currency investment firm Grayscale has formally submitted an application to the Securities and Exchange Commission (SEC) for the creation of a new Ether (ETH) futures exchange-traded fund (ETF). The proposal outlines the intention to list and trade shares of the “Grayscale Ethereum Futures Trust ETF” under the New York Stock Exchange Arca Rule 8.200-E.
Grayscale Advisors, the managing entity of the ETF and referred to as the “sponsor” in the filing, is in the process of registering as a commodity pool operator with the Commodity Futures Trading Commission (CFTC). Additionally, Grayscale Advisors has enlisted Videnct Advisory as a subadviser to act as the trust’s commodity trading adviser.
The objective of the Grayscale Ethereum Futures Trust is to maintain holdings in Ether futures contracts with a consistent expiration profile. The filing specifies that the trust will not carry futures positions until cash settlement. Unlike other ETFs, the Ether futures contracts within this ETF will not necessitate the use of an Ether custodian. Instead, the trust will initiate an open position in futures contracts by depositing an initial margin amount, similar to a cash performance bond.
This development follows the trend of asset management firms seeking approval for Ether futures ETFs, with Valkyrie being one of the recent contenders. The SEC’s potential approval of ETFs based on Ether futures has generated optimism within the Ethereum market.
Grayscale recently achieved a partial victory against the SEC in its pursuit of converting the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. While the outcome doesn’t guarantee the eventual listing of a Grayscale spot Bitcoin ETF, it has been received with enthusiasm by the crypto community.