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

    danygeemarketingBy danygeemarketingFebruary 22, 2024No Comments2 Mins Read

    Coinbase endorsed Grayscale’s proposal to transform its Ethereum (ETH) belief into an exchange-traded fund (ETF) in a February 21 letter to the U.S. Securities and Trade Fee (SEC).

    Coinbase Chief Authorized Officer Paul Grewal mentioned the change’s letter supplied authorized, technical and financial arguments supporting the approval of the spot Ethereum fund. He added:

    “Our letter lays out what anybody who pays even the slightest consideration to this topic is aware of: ETH shouldn’t be a safety. In truth, earlier than and after the merger, neither the SEC, CFTC, nor the market thought-about ETH to be a safety, however reasonably a safety. develop items.”

    Coinbase’s endorsement comes amid rising cryptocurrency market expectations for a spot Ethereum ETF and displays the market’s enthusiasm for a spot Bitcoin ETF. Notably, well-known asset managers comparable to BlackRock and Constancy have additionally utilized to launch their very own spot Ethereum ETFs.

    Why Spot ETH ETF Ought to Get Approval

    Coinbase outlined 5 key factors in its letter advocating for monetary regulators to approve an Ethereum ETF.

    First, it highlights the popularity of Ethereum as a commodity, citing examples such because the Commodity Futures Buying and selling Fee’s (CFTC) regulation of Ethereum futures, public statements by fee officers, and federal court docket rulings.

    Second, Coinbase echoes the SEC’s current endorsement of a Bitcoin ETF spot, claiming that this precedent ought to apply equally, if no more forcefully, to the itemizing and buying and selling of Ethereum ETF shares.

    The corporate additionally highlighted Ethereum’s proof-of-stake mechanism as proof of sturdy governance, highlighting components comparable to possession distribution, liquidity and resistance to fraudulent exercise.

    Moreover, Coinbase famous that Ethereum’s spot buying and selling exercise, excessive liquidity, and tight spreads available in the market reveal its effectivity and maturity. It additional underscores ETH’s large nominal USD buying and selling quantity, which exceeds that of many S&P 500 shares.

    Coinbase added: “ETH’s nominal USD buying and selling quantity is considerably bigger than the overwhelming majority of shares within the S&P 500, together with when adjusted for whole market capitalization.”

    Lastly, Coinbase highlighted its superior market surveillance capabilities to observe ETH spot market transactions and stop fraud, in addition to its partnership with the Chicago Mercantile Trade.

    Total, Coinbase believes that approval of Grayscale’s ETF proposal will probably be according to SEC ideas and signify a prudent choice by the regulator.

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