Grayscale has updated its regulatory filing with plans to convert its Ethereum Trust into a spot exchange-traded fund (ETF). The amendment, filed on March 15, strengthens the previous filing in several ways. It argues that surveillance sharing within the CME ETH market is sufficient to guard against fraud and manipulation in the spot ETH market.

The latest amendment includes a correlation analysis by Coinbase to demonstrate market correlation. Coinbase found a consistently high correlation between the CME ETH futures market and the spot Ethereum market over the past three years, surpassing the correlation observed between the CME Bitcoin futures market and the spot Bitcoin market, as noted by the SEC.

Furthermore, the amendment details the creation and redemption of ETF shares, focusing solely on cash transactions. It specifies that authorized participants cannot deal with ETH directly.

According to the filing, Grayscale Ethereum Trust now holds $11.8 billion in assets under management (AUM), unlocking over $1.73 billion of value with the ETF conversion.

Grayscale's Chief Legal Officer, Craig Salm, emphasized the broad appeal of spot Ethereum ETFs, stating that investors deserve access to Ethereum in this form. He noted that the case for an Ethereum ETF is as strong as it was for spot Bitcoin ETFs.

The amendment addresses concerns about market manipulation and creation/redemption methods, which were obstacles for spot Bitcoin ETF approvals. However, expectations for Ethereum ETF approval by the end of May are declining, with Polymarket placing the odds at just 26% as of March 15.