Grayscale Files Ambitious Application for Near Protocol ETF, Signaling Major Crypto Evolution

In a significant move for the digital asset sector, Grayscale Investments has formally submitted an application to the U.S. Securities and Exchange Commission (SEC) to launch a spot exchange-traded fund (ETF) for Near Protocol (NEAR). This filing, reported on March 21, 2025, represents a pivotal step in the maturation of cryptocurrency investment vehicles and highlights growing institutional interest in blockchain platforms beyond Bitcoin and Ethereum. The application follows a series of landmark SEC approvals for spot Bitcoin ETFs earlier in the decade, setting a potential precedent for single-asset crypto funds tied to smart contract platforms.

Grayscale’s Near Protocol ETF Filing Details

Grayscale Investments, a subsidiary of Digital Currency Group, filed a Form S-1 registration statement with the SEC’s Division of Corporation Finance. This document initiates the regulatory review process for the proposed Grayscale Near Protocol Trust. The trust aims to hold NEAR tokens directly, providing investors with a regulated, familiar brokerage account-based exposure to the asset’s price performance. Consequently, investors would not need to manage private keys or use cryptocurrency exchanges.

This filing builds upon Grayscale’s established track record. The firm successfully converted its flagship Grayscale Bitcoin Trust (GBTC) into a spot ETF in January 2024. That conversion followed a protracted legal victory against the SEC. The firm now manages a suite of single-asset and thematic investment products. The NEAR ETF application demonstrates a strategic expansion into what analysts term “Web3 infrastructure” assets.

Understanding Near Protocol and Its Market Position

Near Protocol is a decentralized, proof-of-stake blockchain platform designed for usability and scalability. It utilizes a unique sharding technology called Nightshade to achieve high transaction throughput. The network positions itself as a developer-friendly environment for decentralized applications (dApps). Its native token, NEAR, is used for transaction fees, staking, and governance.

As of early 2025, NEAR consistently ranks among the top 20 cryptocurrencies by market capitalization. Its ecosystem includes projects in decentralized finance (DeFi), non-fungible tokens (NFTs), and gaming. A potential ETF would offer traditional investors a conduit to this growing ecosystem. The table below outlines key comparative metrics between NEAR and other major smart contract platforms as context for the ETF’s potential appeal.

The Regulatory Pathway and Precedents

The SEC’s approval of multiple spot Bitcoin ETFs in early 2024 established a critical regulatory framework. However, the path for altcoin or single-asset crypto ETFs remains untested. Regulators primarily focus on two key issues: market manipulation concerns and the correlation between the spot and futures markets. For Bitcoin, the existence of regulated CME futures markets satisfied the SEC’s surveillance-sharing requirements.

For NEAR, the regulatory argument may differ. Grayscale’s application will likely need to demonstrate robust custody solutions, accurate pricing mechanisms, and sufficient liquidity. The firm’s existing infrastructure from its other trusts provides a foundational advantage. Furthermore, the evolving political and judicial landscape regarding digital asset regulation could significantly impact the review timeline, which typically spans several months at a minimum.

Potential Market Impact and Investor Implications

A successful launch of a Near Protocol ETF would carry substantial implications for multiple market participants. For retail and institutional investors, it would provide:

• Regulated Access: Exposure through traditional tax-advantaged accounts like IRAs and 401(k)s.
• Simplified Custody: Elimination of technical barriers associated with self-custody.
• Enhanced Liquidity: Potential for tighter bid-ask spreads and larger trade sizes.
• Price Discovery: A new, transparent venue influencing the global NEAR price.

For the Near Protocol ecosystem, an ETF could act as a powerful validator. It would likely attract increased developer attention and capital inflows. However, analysts caution that correlation with broader crypto market volatility would persist. The ETF’s structure also means investors hold a share of a trust holding the asset, not the underlying NEAR tokens for direct ecosystem participation like staking.

Expert Perspectives on the Filing’s Significance

Financial and blockchain analysts view Grayscale’s move as a calculated expansion. “Grayscale is strategically building a full-spectrum digital asset product suite,” noted a report from Bloomberg Intelligence. “Following their Bitcoin and Ethereum products, targeting high-performance Layer-1 platforms like Near Protocol is a logical next step to capture investor interest in scalable Web3 infrastructure.”

Legal experts emphasize the regulatory hurdles. “The SEC’s view on whether NEAR constitutes a security will be the central question,” stated a partner at a firm specializing in financial regulation. “Grayscale’s argument will hinge on demonstrating sufficient decentralization of the Near Protocol network to distinguish it from an investment contract.” The outcome may set a precedent for similar applications for other altcoins.

Conclusion

Grayscale’s application for a Near Protocol ETF marks a bold initiative to bridge decentralized blockchain networks with traditional finance. This filing underscores the ongoing institutionalization of the cryptocurrency market. While the SEC’s review process will be lengthy and scrutinous, the mere submission signals strong confidence in the long-term viability of assets like NEAR. The potential approval of a Grayscale Near Protocol ETF would further democratize access to innovative blockchain technologies, offering a new chapter for both investors and the evolving digital economy. The market now awaits the SEC’s response, which will provide crucial guidance on the future of single-asset crypto investment products.

FAQs

Q1: What is a spot cryptocurrency ETF?
A spot cryptocurrency ETF is an exchange-traded fund that holds the actual underlying digital asset (like NEAR tokens). Its share price is designed to track the market price of the asset it holds, providing direct exposure without investors needing to buy or store the cryptocurrency themselves.

Q2: How long does the SEC typically take to review an ETF application?
The SEC review process for a new ETF is not fixed but often takes a minimum of several months. It can extend much longer, especially for novel products like a single-asset crypto ETF. The process involves multiple rounds of comments, revisions, and potential delays for public commentary or regulatory changes.

Q3: Can investors stake NEAR through the proposed Grayscale ETF?
No. The proposed Grayscale Near Protocol Trust would be a passive, custodial holding vehicle. The trust would hold NEAR tokens, but the structure of an ETF share does not confer the rights to participate in network activities like staking or governance. Shareholders gain exposure to the price of NEAR only.

Q4: What are the main risks of investing in a potential NEAR ETF?
Primary risks include the inherent volatility of cryptocurrency prices, regulatory uncertainty (the ETF could be rejected or face future regulatory challenges), counterparty risk associated with the custodian holding the assets, and the potential for the ETF’s market price to deviate from the net asset value (NAV) of the underlying NEAR tokens.

Q5: Has the SEC approved any other altcoin ETFs besides Bitcoin?
As of March 2025, the U.S. Securities and Exchange Commission has not approved any spot ETFs for cryptocurrencies other than Bitcoin. Several applications for spot Ethereum ETFs are under active review. A Near Protocol ETF application places NEAR among the next wave of assets seeking this type of regulated investment vehicle.