Coinbase backs Grayscale’s Ethereum ETF bid, spotlighting ETH as a commodity

Coinbase has endorsed Grayscale’s bid to person its Ethereum (ETH) Trust into an exchange-traded money (ETF) successful a Feb. 21 letter addressed to the Securities and Exchange Commission (SEC).

Coinbase’s main ineligible officer, Paul Grewal, said the exchange’s missive provided the legal, technical, and economical arguments supporting spot Ethereum funds’ approval. He added:

“Our missive lays retired what anyone knows who’s paid adjacent the slightest spot of attraction to the subject: ETH is not a security. In fact, earlier and aft the Merge, the SEC, the CFTC, and the marketplace person treated ETH not arsenic a information but a commodity.”

Coinbase’s endorsement comes amid expanding anticipation successful the crypto marketplace for a spot Ethereum ETF, mirroring the marketplace enthusiasm surrounding spot Bitcoin ETFs. Notably, salient plus managers similar BlackRock and Fidelity, among others, person besides filed for their ain Spot Ethereum ETFs.

Why spot ETH ETFs should beryllium approved

Coinbase outlined 5 captious points successful its missive advocating for the fiscal regulators’ support of an Ethereum ETF.

Firstly, it emphasized Ethereum’s designation arsenic a commodity, citing instances specified arsenic the regularisation of ETH futures by the Commodity Futures Trading Commission (CFTC), nationalist statements from Commission officials, and national tribunal rulings.

Secondly, Coinbase drew parallels with the SEC’s caller endorsement of spot Bitcoin ETFs, asserting that this precedent should use similarly, if not much forcefully, to the listing and trading of ether ETF shares.

The institution besides highlighted Ethereum’s Proof-of-Stake mechanics arsenic grounds of robust governance, highlighting factors similar ownership distribution, liquidity, and resilience against fraudulent activities.

Additionally, Coinbase pointed retired that Ethereum’s spot trading activity, precocious liquidity, and choky spreads successful the marketplace bespeak its ratio and maturity. It further emphasized ETH’s important notional dollar trading volume, surpassing galore S&P 500 stocks.

“ETH’s notional dollar trading measurement is importantly greater than the immense bulk of the stocks that comprise the S&P 500, including erstwhile adjusted for aggregate marketplace value,” Coinbase added.

Lastly, Coinbase highlighted its blase marketplace surveillance capabilities to show ETH spot marketplace trading and forestall fraudulent practices, on with its concern with the Chicago Mercantile Exchange.

In conclusion, Coinbase argued that approving Grayscale’s ETF connection would align with SEC principles and correspond a prudent determination for regulators.

The station Coinbase backs Grayscale’s Ethereum ETF bid, spotlighting ETH arsenic a commodity appeared archetypal connected CryptoSlate.