In a groundbreaking move, BlackRock, the world’s largest asset manager, has filed an application for an Ethereum spot exchange-traded fund (ETF), igniting a flurry of activity in the cryptocurrency market. This strategic decision follows the firm’s earlier application for a Bitcoin spot ETF in June 2023, marking a continued and deepening commitment to the cryptocurrency sector.
Ethereum’s price responded rapidly to the announcement, with ETH’s value surging to its highest level of the day, near $2,100, immediately following the news. This spike represented an approximate 3% increase from just before the filing. Despite a slight retraction, the price remained about 9% higher than 24 hours earlier, demonstrating the market’s positive reaction to BlackRock’s initiative.
The ETF application, revealed in a Nasdaq filing, aims to list the product on the U.S. exchange, subject to regulatory approval. Significantly, the iShares Ethereum Trust, part of BlackRock’s ETF division, was registered in Delaware as part of this initiative. Coinbase has been designated as the custodian for the ether held by the ETF. This partnership is bolstered by a market-surveillance pact between BlackRock and Coinbase, a critical element for gaining the U.S. Securities and Exchange Commission’s (SEC) approval.
BlackRock CEO transforms into vocal supporter of Ethereum and Bitcoin
Larry Fink, CEO of BlackRock, has notably transformed into a vocal supporter of cryptocurrencies, a stark shift from his earlier skepticism. This change in perspective aligns with BlackRock’s growing involvement in the cryptocurrency market.
In their filing, BlackRock addressed potential SEC concerns regarding the surveillance-sharing aspect of the ETF. They argued that the mechanisms for monitoring CME Group’s ether futures, already in use for existing ETFs, closely match spot ETH prices. This assertion suggests a robust fraud detection system applicable to spot Ethereum ETFs.
In response to BlackRock’s trailblazing move, several competitors have reacted promptly. Grayscale Investments is converting its Ethereum Trust into a spot Ether fund. Similarly, Hasdex and Invesco have filed applications with the SEC for their own spot Ether ETFs.
In an interview we refered to earlier Blackrock CEO Larry Fink had already expressed optimism about the increasing demand for cryptocurrencies among gold investors.
BlackRock’s foray into the Ethereum ETF market not only signifies its bullish stance on cryptocurrencies but also acts as a catalyst for broader market interest and strategic movements in the crypto ETF sector. This development is poised to reshape the landscape of cryptocurrency investments, offering easier access to crypto assets for average investors and potentially broadening the market’s reach.