UpdatesMay 19, 2023

Grayscale pulls out of plans to launch ETH Futures ETF

A popular US digital asset management company has come under attack from US officials.

Grayscale has decided to remove the mention of the Ethereum Futures ETF from a number of documents recently filed with the U.S. Securities and Exchange Commission (SEC). The most significant factor that has led to this situation is the extremely uncertain regulatory environment in the United States. Another company managing digital assets, namely Bitwise, also withdrew from similar plans.

Grayscale abandons ETH Futures ETF plans

The popular American company that manages digital assets has apparently definitely withdrawn from its plans to launch an Ether-futures ETF fund. This information was reported, among others, by Bloomberg, noting additionally that Grayscale Investments removed the mention of such a financial product from the documentation submitted to the SEC. It is worth adding that in the same application there are still two other ETFs that this company intends to launch.

Bitwise also did the same. Both companies abandoned their plans for Ether-futures ETFs just days after their requests for such a product caused a sensation in the exchange-traded funds space and among the cryptocurrency community.

So far, both Gryscale and Bitwise have not commented on the reasons behind the changes in their decisions. Experts related to the digital currency sector, however, presume that the actions of the American regulators exerted the greatest influence on the decisions of the above companies. For example, the SEC has repeatedly rejected similar applications for cryptocurrency ETFs from other blockchain companies in the past.

Regulatory uncertainty and market volatility

It is worth being aware of the fact that while the exact reasons behind both Grayscale's and Bitwise's reversals remain speculative, it shows that cryptocurrency companies must adapt to the volatility of trends and regulations in the United States. A big operational concern is that these companies may have faced both regulatory uncertainty and market volatility.

Some crypto industry analysts have also noted that the recent liquidity crisis may have led to a cautious stance from the aforementioned digital asset managers at both companies. Faced with the potential for trouble, both U.S. investment firms may have deemed it prudent to withdraw their intentions to launch Ether-futures ETFs.