Grayscale and Coinbase Negotiate with SEC on Spot Ether ETF – TradingView News

Crypto firms Grayscale and Coinbase recently met with U.S. Securities and Exchange Commission (SEC) officials to discuss a rule change for the launch of spot Ether exchange-traded funds (ETFs).

Grayscale is seeking to convert its Ethereum Trust, which tracks the market price of Ether ETHUSD – into an ETF, similar to converting its Bitcoin Trust into an ETF in January. The meeting was held March 6 after the proposal's comment period ended and addressed concerns about possible market manipulation if the fund were approved.

According to a presentation shared by the SEC, Coinbase argued that the same considerations that led to the approval of Bitcoin ETFs should be applied to Ether because the token has “mechanisms that significantly limit ETH’s vulnerability to fraud and manipulation “.Cointelegraph

Another presentation point relates to Coinbase’s surveillance sharing agreement with the Chicago Mercantile Exchange (CME). The mechanism was implemented for Bitcoin ETFs at the request of the SEC to improve trading surveillance.

Coinbase also highlighted the correlation between Ether futures and spot markets, similar to the Bitcoin market, noted Nate Geraci of ETF Store on spot Ether ETFs.

Grayscale is also proposing a second ETF for Ether futures trading. The main difference between spot and futures markets is that in the spot market, assets are traded immediately, while in the futures market, contracts are made to buy or sell assets at a specific price at a later date.

Some analysts have suggested that Grayscale may be using its futures ETF application as a “Trojan horse” to get the SEC to approve its spot ETF.

Several asset managers, including Invesco, Galaxy Digital, Fidelity, Franklin Templeton and BlackRock, are seeking the green light for a spot Ether ETF. Final deadlines for an SEC decision are expected in May.

Bloomberg's Eric Balchunas believes asset managers are still in the dark about regulators' views on the crypto investment vehicle. “Normally I would say that [a] “Good sign, but as far as I know the staff has not yet commented on the issuers, which is not a good sign since they have commented on BTC ETFs in the past,” Balchunas said.