Crypto ETF Plans in Shambles: Grayscale and Bitwise Hit the Brakes on Ether Futures

The Ether ETF Plans: Just a Fading Dream?

Two of the biggest players in the crypto asset management game, Grayscale Investments and Bitwise Asset Management, have officially hit the brakes on their Ether (ETH) futures exchange-traded funds (ETFs). And why? Let’s just say the SEC is watching, like a hawk circling over a particularly juicy piece of roadkill.

Grayscale’s Rollercoaster Ride

On May 17, in what can only be described as a crypto soap opera, Grayscale filed an amendment with the Securities and Exchange Commission (SEC) to pull any mention of their Ether futures ETF. This twist comes hot on the heels of their big reveal—a trio of ETF products that had people buzzing, including a semi-spot Bitcoin ETF and a privacy ETF focused on blockchain companies.

Hold Your Horses!

• Grayscale’s amendment follows a previous SEC request for Grayscale to withdraw its application for a Filecoin Trust. Talk about a bad break-up!
• The SEC’s reasoning? They warned that Filecoin (FIL) might just qualify as a security, leaving Grayscale feeling a little like a deer caught in headlights.

Bitwise Bows Out

Meanwhile, Bitwise decided to play it safe and has completely pulled its application to launch an ETH-based futures ETF. Their May 17 amendment to the SEC was like a polite “thanks, but no thanks” to any possible future earnings from the fund, stating that no securities had been sold or would be sold.

The SEC’s Skeptical Stance

As we dive deeper into this regulatory drama, it’s become clear that the SEC is acting like a strict parent with a no-nonsense attitude. A Bitcoin futures ETF made a debut back in 2021, leading many to believe a spot crypto ETF would soon follow. But, after a rough year in 2022, it appears regulators have grown more wary, like someone who tried sushi for the first time and is now never touching raw fish again.

The Ripple Effect

The fallout from Grayscale and Bitwise’s slowed ETF plans could have some far-reaching implications. Investors who were hoping for a magic return might now be left feeling like they chased after mirages in the desert—lots of hope, but no water.

“A Bitcoin-based futures ETF debuted in the last quarter of 2021, which had many in the crypto community convinced that a spot crypto ETF was imminent. Two years later, all we’ve got is skepticism and a ton of regulatory red tape.”

What Lies Ahead?

The future of crypto-focused ETFs remains uncertain as scrutiny from regulators continues. What’s next for Grayscale and Bitwise? Will they bounce back or go down with the ship?

For now, only time will tell. But one thing is certain: watching the crypto market is like participating in a grand game of poker, where every player has a trick up their sleeve. Buckle up, folks!