Grayscale CEO: We will focus on converting ETH trust into spot products

What’s new? Grayscale CEO Michael Sonnenschein has said the investment firm will focus on converting its Ethereum trust, the largest in the world, into spot exchange-traded products. Grayscale had earlier withdrawn its application to the US Securities and Exchange Commission (SEC) to launch an ETH-based futures exchange-traded fund (ETF), which had been under review since October last year.

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What else is known? Sonnenschein attributed the withdrawal of the application to the fact that a number of futures products are already available to investors. VanEck’s EFUT and ProShares’ EETH futures ETF funds EFUT are currently available in the market, accounting for more than 90% of the trading volume.

Grayscale previously paved the way for the approval of spot bitcoin ETFs by winning a lawsuit against the SEC in which the regulator’s refusal to allow such products into the market was deemed unreasonable. This allowed the company to convert its GBTC bitcoin trust into a spot fund. Along with it, 10 other new funds from various investment firms, including BlackRock and Fidelity, were allowed to enter the market on January 11.

After the incredible success of these funds, whose total net inflows at the time of writing total $11,77 billion, companies switched to creating similar products based on the largest altcoin.

For example, Grayscale has applied to convert its Ethereum trust into a spot ETF. BlackRock, VanEck, ARK Invest, Fidelity, Invesco, and Hashdex have also applied to launch new ETFs. The SEC has repeatedly postponed the deadline for a final decision on these products, with the next key date being May 23. However, according to media reports, the regulator is leaning toward rejecting the applications.

Grayscale has also applied to set up a mini trust — a small fund in which the assets of a larger trust will be invested. Grayscale chief legal officer Craig Salm explained that the Grayscale Ethereum Mini Trust is intended to complement the company’s Ethereum product lineup to support a wide range of investors.

He added that the mini trust will be launched as an alternative spot ETF with lower fees and a focus on investors interested in optimizing their investments, “a ‘buy-and-hold’ strategy in their brokerage or retirement account, for example.”

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Earlier, Grayscale announced the launch of the Bitcoin Mini Trust, an additional version of the already functioning GBTC spot bitcoin fund. Its fee will be only 0,15%, which is much lower than its competitors. Management fees for the main GBTC are 1,5%, the highest in the US crypto ETF sector, which could be one of the reasons for the continued outflows from the fund.