• The US SEC has been meeting with Grayscale Investment officials to discuss the necessary changes needed in the spot ETF applications in the past few months.
• The decision of whether to approve or disapprove the Grayscale Ethereum Trust has been postponed until January 25, 2024.

The Grayscale Ethereum Trust (OTC: ETHE) has eclipsed one of the leading Ether-based investment products with a market value of about $6.7 billion at the time of this report. However, the bid by Grayscale Investments to convert its Ethereum Trust to an ETF and avail it for public trading through spot exchange-traded funds (ETF) has been delayed by the United States Securities and Exchange Commission (SEC).

According to an SEC update dated December 5, 2023, the decision to list Grayscale Ethereum Trust under NYSE Arca has been postponed by 45 days. The SEC noted;

The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein. Accordingly, the Commission designates January 25, 2024, as the date by which the Commission shall either approve or disapprove or institute proceedings to determine whether to disapprove, the proposed rule change,

Closer Look at the Ethereum Spot ETF in the US

The approval of spot Ethereum in the United States is highly anticipated due to the expected impact on the underlying price action. The example of gold spot ETF, which triggered a parabolic rally in the subsequent years, has been used as a template of how the approval of spot Ether ETF could impact the underlying value. Moreover, Grayscale Investments is competing with BlackRock, a leading fund manager with more than $9 trillion in assets under management, to have their respective spot Ether ETF approved by the United States SEC. Nonetheless, experts have argued that it is not likely for the US SEC to approve the Ethereum ETF before the dozens of spot Bitcoin ETFs.

Moreover, Bitcoin is largely considered a commodity rather than a security, while the US SEC has argued that most ERC20 tokens and NFTs on the Ethereum network are unregistered securities. Arguably, experts believe the US SEC could approve all the spot Bitcoin ETFs by January 10, which could make January 25 a probable approval date for the spot Ether ETF.

Ether Price Action

Ethereum price has closely followed Bitcoin price action in the past few weeks after consolidating for the past 18 months. Trading around $2,258 on Wednesday, Ether has seen its daily average trading volume spike in the recent past to nearly $30 billion after hitting a fresh yearly high of around $2,310 on Tuesday.

The Ether bullish outlook is bolstered by a recent weekly golden cross between the 50 and 200 Moving Averages (MA) and the Relative Strength Index (RSI) attempting to cross the 70 mark for the first time since the 2021 bull run.

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