BlackRock, the world’s largest asset manager, has submitted a Form S-1 with the U.S. Securities and Exchange Commission a week after registering its iShares Ethereum Trust with Delaware’s Division of Corporations. The strategic move by BlackRock signals a huge step toward offering its customers exposure to the performance of the industry’s second-largest cryptocurrency, Ethereum.

BlackRock Files SEC Prospectus For Spot Ether ETF

Traditional finance behemoth BlackRock has filed an S-1 form with the Securities and Exchange Commission to list a spot-based Ethereum exchange-traded fund.

In the application, BlackRock says that the iShares Ethereum Trust “seeks to reflect generally the performance of the price of ether”, with San Francisco-based crypto exchange Coinbase serving as the custodian for the underlying ETH.

The filing comes after the $9 trillion asset manager outlined its proposal for the ETH ETF in a filing with the Nasdaq stock exchange earlier this month. BlackRock further solidified its plans to launch an ETF for Ethereum last week by registering an entity dubbed “iShares Ethereum Trust” in Delaware.

A spot Ethereum ETF would allow retail investors to gain exposure to the second-largest cryptocurrency by market capitalization without having to directly procure the asset. The financial instrument could potentially open the door for billions of dollars of new capital.

BlackRock has already made waves in the crypto and TradFi worlds by aspiring to list a spot Bitcoin ETF, a move that caused frenzied bullish price action and drove BTC to its current price of around $36,900. BlackRock’s CEO Larry Fink has now become an outspoken Bitcoin proponent, essentially reversing his earlier skepticism.

Implications For Ether 

The price of ether jumped circa 2 percent to $2,079 on the BlackRock S-1 filing news before settling at $2,030 as of publication time. 

Besides BlackRock, other institutional giants, including Grayscale Investments, Ark Invest, and Valkyrie, have also submitted applications for spot Ethereum ETFs. Any approval could take months as the SEC has repeatedly rejected or delayed previous applications for proposed spot Bitcoin funds but has approved a host of crypto futures ETFs.

However, it’s generally believed by crypto and ETF market pundits that the first SEC approval of a spot-based crypto ETF is just around the corner. Bloomberg Intelligence analysts James Seyffart and Eric Balchunas predict a 90% chance of a greenlight no later than January 10, 2024.

Others have suggested that rejection of spot crypto ETFs might ignite some legal turmoil for the SEC, which in August suffered an earth-shattering court loss when it was ruled the regulator must re-review Grayscale’s bid to convert its flagship Bitcoin Trust (GBTC) into a spot ETF.

An ether spot ETF would have a similar impact as a Bitcoin counterpart, appealing to sophisticated investors who previously didn’t feel comfortable buying crypto. Moreover, Ethereum adds an extra layer of intrigue as a proof-of-stake (PoS) token, which suggests investors could also stake the underlying ETH for more rewards.

All of this means that potential approval of spot Ethereum ETFs would push the price of ether higher as fresh money enters the market of the second-largest crypto.

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Filed under: Bitcoin - @ November 16, 2023 3:19 pm