Coinbase supported Grayscale's proposal to transform the Ethereum (ETH) belief into an exchange-traded fund (ETF) in a letter dated February 21 to the Securities and Trade Fee (SEC).

Paul Grewal, Coinbase's chief authorized officer, stated the change's letter supplied authorized, technical and financial arguments to help the approval of the Spot Ethereum fund. he added:

“Our letter states what anybody who has paid any consideration to this topic is aware of: ETH shouldn’t be a safety. In actual fact, earlier than and after the merger, the SEC, CFTC, and the market have has been handled as a commodity relatively than a safety.

Coinbase's endorsement displays the market enthusiasm surrounding the Bitcoin Spot ETF and comes amid heightened expectations for the Spot Ethereum ETF within the crypto market. Notably, outstanding asset administration corporations resembling BlackRock and Constancy have additionally filed for their very own Spot Ethereum ETFs.

Why Spot ETH ETF must be accredited

Coinbase outlined 5 key factors in a letter in search of approval for the Ethereum ETF by monetary regulators.

First, he emphasised that Ethereum is acknowledged as a commodity, citing examples such because the Commodity Futures Buying and selling Fee's (CFTC) regulation of ETH futures, public statements from fee officers, and federal court docket rulings.

Second, Coinbase takes the same view to the SEC's current endorsement of Spot Bitcoin ETFs, and that this precedent applies equally, if no more strongly, to the itemizing and buying and selling of Ether ETF shares. argued that it ought to.

The corporate additionally highlighted Ethereum's proof-of-stake mechanism as proof of strong governance, highlighting components resembling possession distribution, liquidity, and resilience to fraud.

Moreover, Coinbase famous that Ethereum's spot buying and selling exercise, excessive liquidity, and tight market spreads exhibit its effectivity and maturity. Moreover, he highlighted that ETH's notional buying and selling quantity exceeds that of many S&P 500 shares.

“ETH's notional greenback buying and selling quantity is considerably better than the vast majority of shares within the S&P 500, even when adjusted for whole market worth,” Coinbase added.

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

In conclusion, Coinbase argued that approving Grayscale's ETF proposal is in keeping with the SEC's rules and is a prudent determination for the regulator.