Grayscale Drops Staking from Spot Ether ETF Proposal

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As a seasoned crypto investor with a keen interest in the Ethereum ecosystem, I’m keeping a close eye on the latest developments regarding Grayscale’s Ethereum Trust and its planned ETF conversion. The removal of the staking component from the proposed spot Ethereum ETF was an anticipated move, given that other issuers have followed suit in recent days.

Grayscale’s planned Ether ETF will no longer include a staking feature as originally proposed. This modification is reflected in the updated proxy statement, filed on Tuesday, which no longer mentions ether staking through the trust for the Grayscale Ethereum Trust.

Among all the modifications I’ve identified, this is the most significant and substantial one. I don’t see any other alterations that are as clear-cut. Regarding your Ethereum held by the Fund, please be aware that it cannot be staked by anyone. This was an anticipated development with no other noteworthy changes apparent to me at present.

— James Seyffart (@JSeyff) May 21, 2024

Several other ETF providers, including Fidelity, have recently omitted staking features from their Ethereum ETF filing documents. Fidelity made this change in its S-1 registration statement earlier today. According to James Seyffart, an ETF analyst at Bloomberg, Grayscale’s decision to abandon staking in its Ethereum ETF was anticipated, signaling a trend towards non-staking Ethereum ETF applications.

Five prospective Ethereum ETF applicants, including Fidelity, VanEck, Invesco/Galaxy, Ark/21Shares, and Franklin, have recently filed amended 19b-4 forms with the Chicago Board Options Exchange (CBOE) within the past quarter-hour.

— James Seyffart (@JSeyff) May 21, 2024

In October, Grayscale submitted a Form 19b-4 to the NYSE Arca with the intention of transforming its Ethereum trust into an exchange-traded fund (ETF) that tracks the price of Ether as a spot commodity. This action comes after Grayscale’s accomplishment in converting its Bitcoin trust into a similar spot Bitcoin ETF, following a court win and SEC approval in January.

As a financial analyst, I’ve observed that Grayscale recently withdrew its application for an Ethereum futures Exchange-Traded Fund (ETF). According to Seyffart’s perspective, this decision could be tactical to shield the primary focus of its ongoing Ethereum spot ETF application. The Securities and Exchange Commission (SEC) might approve futures ETFs to cater to investor demand while denying spot ETFs based on current regulations.

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2024-05-22 04:20