Grayscale's bid to list and trade shares of its Ether futures exchange-traded fund (ETF) has hit a roadblock as the proposal was withdrawn, according to a document filed by the US Securities and Exchange Commission (SEC) on Tuesday.

The application for the Grayscale Ethereum Futures Trust ETF, initially filed by NYSE Arca, Inc. in September last year, was formally withdrawn on May 3, as disclosed in the filing.

This development comes after the SEC had previously postponed consideration of Grayscale's ether futures ETF, with the most recent delay occurring in March. However, the agency had approved a set of ether futures ETFs in October 2023, including offerings from ProShares, VanEck, and Bitwise.

Bloomberg ETF analyst James Seyffart highlighted the withdrawal, initially speculating that Grayscale might have intended to leverage its ether futures ETF to influence the SEC into approving its spot ETH ETF. However, with Grayscale's withdrawal, Seyffart sees limited options for the company if the SEC fails to greenlight its spot ether ETF.

Despite the withdrawal, uncertainty looms over the SEC's stance on spot Ether ETF applications. SEC Chair Gary Gensler's recent comments in a CNBC interview indicate ongoing deliberations on the matter.

The withdrawal of Grayscale's proposal underscores the complexities surrounding cryptocurrency ETFs and regulatory approval processes. As the SEC continues its assessment, stakeholders await further developments in the evolving landscape of digital asset investment opportunities.