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

Coinbase has endorsed Grayscale’s mumble to convert its Ethereum (ETH) Have confidence into an substitute-traded fund (ETF) in a Feb. 21 letter addressed to the Securities and Change Payment (SEC).

Coinbase’s chief correct officer, Paul Grewal, acknowledged the alternate’s letter equipped the right, technical, and financial arguments supporting region Ethereum funds’ approval. He added:

“Our letter lays out what anybody is aware of who’s paid even the slightest little bit of attention to the realm: ETH is now not a security. In point of fact, earlier than and after the Merge, the SEC, the CFTC, and the market maintain handled ETH now not as a security but a commodity.”

Coinbase’s endorsement comes amid increasing anticipation in the crypto marketplace for a region Ethereum ETF, mirroring the market enthusiasm surrounding region Bitcoin ETFs. Particularly, favorite asset managers love BlackRock and Fidelity, amongst others, maintain also filed for their very maintain Region Ethereum ETFs.

Why region ETH ETFs wants to be popular

Coinbase outlined 5 serious aspects in its letter advocating for the financial regulators’ approval of an Ethereum ETF.

Originally, it emphasized Ethereum’s recognition as a commodity, citing cases a lot like the regulation of ETH futures by the Commodity Futures Trading Payment (CFTC), public statements from Payment officers, and federal courtroom rulings.

Secondly, Coinbase drew parallels with the SEC’s most current endorsement of region Bitcoin ETFs, declaring that this precedent can also merely aloof be aware equally, if now not more forcefully, to the itemizing and procuring and selling of ether ETF shares.

The company also highlighted Ethereum’s Proof-of-Stake mechanism as evidence of sturdy governance, highlighting factors love possession distribution, liquidity, and resilience against wrong activities.

Furthermore, Coinbase pointed out that Ethereum’s region procuring and selling job, high liquidity, and tight spreads available in the market ticket its efficiency and maturity. It further emphasized ETH’s colossal notional greenback procuring and selling volume, surpassing many S&P 500 stocks.

“ETH’s notional greenback procuring and selling volume is vastly increased than the overwhelming majority of the stocks that comprise the S&P 500, along side when adjusted for aggregate market rate,” Coinbase added.

Lastly, Coinbase highlighted its subtle market surveillance capabilities to visual show unit ETH region market procuring and selling and prevent wrong practices, along with its partnership with the Chicago Mercantile Change.

In conclusion, Coinbase argued that approving Grayscale’s ETF proposal would align with SEC principles and signify a prudent resolution for regulators.