Grayscale’s Push for NEAR Protocol ETF: A New Era for Wall Street Access to Layer-1 Blockchains
The financial landscape is witnessing a significant shift as Wall Street looks to gain direct access to Layer-1 blockchains. Following considerable interest in ETFs associated with cryptocurrencies like Solana (SOL) and Ripple (XRP), Grayscale Investments has set its sights on the NEAR Protocol (NEAR). With a recent Form S-1 filing submitted to the U.S. Securities and Exchange Commission (SEC) on January 20, Grayscale is taking steps to transform its existing Near Trust into a spot ETF, now termed the Grayscale Near Trust ETF. This initiative indicates that NEAR is stepping into the institutional spotlight, moving beyond its initial developer-focused roots.
In its filing, Grayscale outlined plans to elevate the Grayscale Near Trust from the OTCQB over-the-counter market to the NYSE Arca exchange. This transition is in line with Grayscale’s conventional strategy, which entails initiating private placements for accredited investors before transitioning into public trading and ultimately pursuing comprehensive spot ETF approval. Once the conversion is accomplished, the ETF will empower investors to gain direct exposure to NEAR—the native token of the Near Protocol—utilizing standard brokerage accounts. This innovative model addresses many issues associated with private trusts, such as low liquidity and tracking errors, and is backed by prominent institutional partners like Coinbase Custody Trust Company and BNY Mellon for custody and administration services.
An intriguing aspect of the proposed Grayscale Near Trust ETF is its focus on staking—a feature typically absent in Bitcoin (BTC) ETFs. The proposed fund plans to stake NEAR tokens on the network, which could generate staking rewards that may be distributed to investors, contingent upon regulatory approval. This staking approach adds an additional layer of potential benefit for investors, distinguishing the Grayscale Near Trust ETF from traditional cryptocurrency funds. However, it’s noteworthy that the price of NEAR is currently experiencing short-term pressures, trading around $1.53 and reflecting a 1.84% decline in the past 24 hours, influenced by broader market trends.
The altcoin ETF market showcases a landscape of mixed institutional flows, as evidenced by data from SoSoValue. While Solana and Chainlink (LINK) recorded modest inflows of $3.08 million and $4.05 million respectively, Ethereum (ETH) faced notable outflows nearing $230 million, followed by XRP with $53.32 million in exits. These figures indicate that investors are reallocating capital within the cryptocurrency space rather than withdrawing completely. NEAR isn’t navigating this competitive environment alone, as the Bitwise Chainlink ETF recently launched on the NYSE Arca as well, further intensifying the ETF race among altcoins.
The growth trajectory of the ETF market suggests a potentially diversified outcome by 2026, where no single altcoin may dominate. Rather, this space may be characterized by a collection of institutional-grade altcoins competing for attention and investment. As institutional interest in cryptocurrencies continues to rise, the dynamics of the market are likely to evolve, presenting opportunities for investors to diversify their portfolios through new financial instruments.
In summation, Grayscale’s initiative to launch the Grayscale Near Trust ETF simplifies the process for traditional investors to access NEAR, eliminating the complexities tied to wallets and private trusts. This filing marks just the beginning for NEAR, emphasizing the importance of meticulous execution moving forward. As the cryptocurrency sector continues to mature, the accessibility and institutional backing of projects like NEAR could play a crucial role in shaping the future of investing in blockchain technologies.
