Blockchain & Crypto

BlackRock Pursues Ethereum ETF

BlackRock filing for Ethereum ETF that followed the recent Bitcoin ETF application sent ETH price to over $2,000.

BlackRock Pursues Ethereum ETF

As revealed in a Nasdaq filing, the world’s largest asset manager BlackRock plans to create an ETF that holds Ethereum’s native cryptocurrency ether and list it on Nasdaq exchange once it gets regulatory approval.

The news immediately sent ETH price broke the $2K threshold and briefly moved to $2,100. After investors chilled a little, the price went down. However, at the point of writing ETH is still trading at $2, 087, which illustrates over 9% growth in the last 24 hours.

To fulfil its ETF plans, BlackRock has already registered a corporate entity “iShares Ethereum Trust” in the state of Delaware. According to the filing, the ether held in the fund will be under the custody of the U.S.-based crypto exchange Coinbase, while an unnamed third party will maintain cash reserves.

Earlier this year, BlackRock applied for a Spot Bitcoin ETF. After the SEC found flaws in the original filing, the asset manager submitted a revised application, partnering with Coinbase which will act as the ETF’s custodian and provide spot market data for pricing.

One of the main objections of the SEC regarding the Bitcoin ETF was finalising a ‘surveillance-sharing agreement’ with Coinbase, which would allow for bilateral surveillance-sharing between Nasdaq and the cryptocurrency exchange.

In the Ethereum ETF, BlackRock preemptively addressed this issue, stating that CME surveillance can detect spot-market fraud that affects both futures ETFs and spot ETPs. Since there are already ETFs that hold ether futures, the company sees no reason to prevent the creation of a spot ETH ETF.

Namely, the asset manager believes that the distinctions between the 1940 Act and the 1933 Act, defining surveillance-sharing rules for the CME ETH futures market versus the spot ETH market, are not meaningful and cannot be a basis for the Commission treating ETH futures ETFs differently from spot ETH ETPs like the iShares Ethereum Trust.

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.