Coinbase, a prominent US crypto exchange, has thrown its weight behind Grayscaleâs bid to turn Ethereum Trust into a spot Ethereum exchange-traded fund (ETF).
Meanwhile, there is high optimism amongst the Ethereum community regarding the US Securities and Exchange Commissionâs (SEC) decision on spot Ethereum ETF.
SponsoredCoinbase Explains Why The SEC Should Approve a Spot Ethereum ETF
On February 22, Coinbaseâs chief legal officer, Paul Grewal, made a detailed 27-page letter public. It lays out the legal, technical, and economic grounds for the SEC to green-light an Ethereum-based ETF.
A key point in Coinbaseâs argument is that Ethereum (ETH) should be seen as a commodity, not a security. This view finds support in the Commodity Futures Trading Commissionâs (CFTC) approval of ETH futures. Additionally, statements from SEC officials and court decisions bolster this stance. Importantly, the SEC has not contested the CFTCâs treatment of ETH as a commodity.
Furthermore, Grewal highlighted the robust governance of Ethereumâs proof-of-stake consensus. This system, he argued, effectively reduces risks of fraud and manipulation.
Read more: How to Buy Ethereum (ETH) and Everything You Need to Know
Hence, Coinbase aims to clarify the Ethereum marketâs dynamics and comprehensive surveillance. It believes these factors warrant the SECâs approval of the proposed ETF.
SponsoredâThe economics show that Ethereum is as resilient as Bitcoin in satisfying the Commissionâs standard for ETP (exchange-traded product) approvals,â Grewal stated.
To demonstrate this, it provided charts showing that Ethereum was mostly on par with other ETF-approved assets and stocks in terms of trading volume and spreads.

However, in December 2023, the SEC delayed its decision on Grayscaleâs spot Ethereum ETF proposal. Opting to extend its review period beyond the usual 45 days, the SEC seeks to evaluate the proposal thoroughly.
Meanwhile, Franklin Templeton, a well-regarded asset management firm, entered the fray with its application for a spot Ethereum ETF earlier this month. This move aligns with efforts by BlackRock, Grayscale, and VanEck, indicating a rising interest in Ethereum-based financial products.
Larry Fink, CEO of BlackRock, has expressed optimism about an Ethereum ETF. He sees it as a catalyst for the wider adoption of asset tokenization. This is a development he eagerly anticipates for the future.
Read more: What is The Impact of Real World Asset (RWA) Tokenization?
Amid these developments, Ethereumâs price has experienced a significant upturn, surpassing $3,000 for the first time since April 2022. This surge reflects the marketâs growing enthusiasm for Ethereum and potential institutional adoption through ETFs.