Grayscale ETF Head Puts Ethereum Chances at 50% by May

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  • Grayscale’s Dave LaValle has hinted at potential legal action if the SEC rejects its Ethereum Trust to spot ETF conversion request.
  • Grayscale’s victory in challenging a Bitcoin ETF rejection last August cleared the way for multiple Bitcoin ETF approvals this January
  • LaValle estimates a 50% chance of an Ethereum ETF approval by May

Grayscale’s head of ETFs, Dave LaValle, has suggested that Grayscale might consider legal action if the SEC denies its request to convert its Ethereum Trust into a spot ETF. Grayscale famously won a legal challenge to its Bitcoin ETF rejection last August, a move that removed a huge hurdle to the US Securities and Exchange Commission (SEC) approving a dozen Bitcoin ETFs in January. LaValle has put the odds of an Ethereum ETF being approved by the first concrete deadline of May at 50% when Ark Invest’s application is due a final decision.

50-50 Chance at Initial Success

LaValle offered his thoughts at a recent Bitcoin panel, where he hinted at potential legal action against the SEC should the agency reject Grayscale’s bid to transform its Ethereum Trust into a spot ETF. LaValle’s remarks come as sentiment surrounding the approval of an Ethereum spot product in 2024 remains predominantly optimistic, although LaValle believes the chances of a first-time approval are only 50-50.

ArkInvest was the first to apply for a spot Ethereum ETF and so theirs will be the first to have a ruling, due in May, with decisions on applications from the likes of BlackRock and Fidelity coming hot on its heels.

While optimism prevails among industry insiders and some securities lawyers, skeptics voice concerns over SEC Chair Gensler’s past reservations about ether’s regulatory status and institutional support relative to Bitcoin.

Gensler Has ‘Little Choice’ Over Ethereum ETF Filings

Despite these fears, experts like Marc Powers, a blockchain professor at the Florida International University College of Law and former SEC enforcement attorney, anticipate the SEC following the precedent set during the bitcoin ETF approval process; Powers recently told Fox Business that he doesn’t think that SEC Chair Gary Gensler “is going to have much of a choice” over the filings.

Grayscale’s application to convert its Ethereum trust into a spot ETF further underscores the industry’s confidence in Ethereum’s long-term potential, with the existence of an Ethereum futures market adding another layer of legitimacy to the asset. This factor could potentially mitigate concerns about market manipulation—a critical consideration for regulatory approval.