Grayscale court victory used in arguments for spot ether ETF

Grayscale Investments’ August victory over the SEC in the DC Circuit Court of Appeals catalyzed the latest ether ETF filings, a segment observer says


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More spot ether ETF filings are likely imminent as industry watchers say SEC approval of ether futures and spot bitcoin funds would all but clear the way for such proposed funds. 

Firms vying to bring such products to market have signaled in filings they believe Grayscale Investments’ win against the SEC in the DC Circuit Court of Appeals last month helps their cause.

Others agree.

Nate Geraci, president of the ETF Store, commented, “Grayscale is clearly bulldozing a regulatory path for spot crypto ETFs, and other fund companies are happy to jump in behind.”

On Wednesday, Ark Invest and 21Shares revealed it was seeking to launch a fund that would directly hold ether, unlike the recently proposed ether futures ETFs.

Developments over the last weeks and months suggested it was an opportune time to start expanding conversations around ether products, people familiar with the filing told Blockworks

Fund group VanEck, which first filed for a spot ether ETF in 2021, renewed its effort to offer such a product the same day.     

Cboe BZX Exchange — the venue on which the proposed fund would trade — filed forms Wednesday detailing reasons for the SEC to approve the planned offerings. These documents highlight the SEC’s approval of bitcoin futures ETFs and emphasize that the Chicago Mercantile Exchange (CME) bitcoin futures market is a substantially regulated and sizable market.

The filings add that the regulator’s continued refusal to allow spot bitcoin ETFs is due to “the seemingly conflicting basis that the CME bitcoin futures market is not a regulated market of significant size — an issue Cboe says was “resolved” in the DC Circuit Court of Appeals.  

Judges in the Grayscale case ruled that approving bitcoin futures ETFs, but not the conversion of its Bitcoin Trust (GBTC) to an ETF, was “arbitrary and capricious.”

“There’s no question Grayscale’s recent court victory was the primary catalyst in these spot ether ETF filings,” Geraci told Blockworks. “ARK and VanEck were clearly prepared for a favorable Grayscale outcome and quickly pounced on the opportunity to file for spot ether ETFs.”

Chance of approval?

The spot ether ETF proposals are the latest in a long list of crypto funds the SEC must rule on, the decisions on all of which could be connected.

In addition to fund issuers filing for a range of spot bitcoin ETFs in recent months, firms have put planned ether futures funds in front of the regulator in recent weeks. 

Read more: SEC now ready to consider ETH futures ETFs, sources say — but what’s changed?

Bloomberg Intelligence ETF Analyst James Seyffart said during a Thursday webinar that the spot ether ETF filings — in addition to mentioning the Grayscale ruling — point out a surveillance-sharing agreement with Coinbase and call the CME a regulated market — “basically all the things we think are the reasons we’re going to get [a] spot bitcoin [ETF].” 

“They’re basically betting that the SEC is not going to be able to figure out a way to deny spot bitcoin ETFs here,” Seyffart said of the issuers filing to launch spot ether products.

If the Grayscale ruling stands and the SEC allows spot bitcoin ETFs to come to market, Geraci argued, the regulator would have a tough time justifying the denial of spot ether ETFs. 

“The SEC appears backed into a corner right now and ETF issuers are emboldened to push the envelope,” Geraci added.

Sumit Roy, a senior analyst at, said the approval of both a spot bitcoin ETF and an ether futures ETF are approved, a spot ether fund would be “all but certain.”

Several industry watchers agree that more spot ether ETF proposals are imminent, and soon. 

Seyffart noted that Grayscale could even look to convert its Ethereum Trust (ETHE) to an ETF, but added that is more likely once the firm gets more clarity on the fate of GBTC.    

“As we’ve seen in the case of spot bitcoin ETF filings and ether futures ETF filings, the first filing tends to be followed by others as issuers jockey to get as close to the front of the line as possible,” Roy said.

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