Grayscale CLO Optimistic on Ethereum Spot ETF Approval, Draws Parallels with Bitcoin

Amidst uncertainties swirling around Ethereum Spot Exchange-Traded Funds (ETFs), Craig Salm, Chief Legal Officer (CLO) at Grayscale, shares his insights, drawing parallels between Ethereum and Bitcoin spot ETFs.

Salm remains upbeat about the prospects of Ethereum spot ETFs gaining approval from the United States Securities and Exchange Commission (SEC), asserting that “the case for the products is just as strong as it was for Bitcoin ETFs.”

1/ Recently, there’s been a lot of chatter about spot #Ethereum ETFs. I personally am not deterred by it and believe the ETFs should be approved. But right now I want to talk about how I think perceived “lack of SEC engagement” should be viewed at this point:

— Craig Salm (@CraigSalm) March 25, 2024

Despite prevailing skepticism within the crypto sphere, Salm maintains unwavering confidence in the approval process. His primary aim is to shed light on the SEC’s engagement with applicants in this context.

Drawing attention to the Commission’s interactions, Salm recalls the positive and constructive engagement during the final months preceding the approval of Bitcoin ETFs. He notes that similar discussions on creation/redemption processes, asset management, custody, among other aspects, are underway for Ethereum ETFs, indicating a potential approval in the offing.

Salm emphasizes that the only notable difference lies in the ETF holding ETH instead of BTC, resulting in fewer engagement avenues for issuers due to prior regulatory interactions.

Despite uncertainty surrounding final approval dates, Salm remains optimistic, asserting that outcomes shouldn’t be prejudged based on perceived regulatory disengagement.

Aligning with crypto luminaries like Coinbase’s Paul Grewal and Brian Quintenz, Salm underscores the necessity of approving Ethereum spot ETFs. Grewal had previously contested the SEC’s stance on Ethereum’s security classification, arguing for ETH exchange-traded products’ legitimacy.

Echoing sentiments from industry figures, Salm advocates for ETH ETFs as commodity futures, aligning with ETH futures ETFs, citing a strong correlation between futures and spot markets.

Salm asserts that investors deserve exposure to ETH through ETFs, reiterating Grayscale’s support for Ethereum spot ETF approval. The firm looks forward to discussing these significant products with the regulatory agency.

Despite a decline in approval odds over time, currently standing at around 25% according to Polymarket data, Salm remains optimistic about the potential approval of ETH exchange products.

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