In a new filing (PDF) with the NASDAQ, asset management giant BlackRock has revealed plans to launch an exchange-traded fund (ETF) based on the cryptocurrency Ethereum.
Keypoints
- BlackRock has filed with the SEC to launch an Ethereum ETF that would hold ether. This follows the company’s previous filing for a bitcoin ETF.
- The Ethereum ETF would be listed on Nasdaq under the iShares brand. Coinbase would be the custodian holding the ether.
- CEO Larry Fink has become a vocal crypto supporter after previously being skeptical. Launching crypto ETFs broadens access for average investors.
- The filing tries to address potential SEC concerns about market surveillance by arguing that CME’s ether futures prices closely track spot ether prices.
- The price of ether jumped after the news, topping $2,000 for the first time since April. This mirrors bitcoin’s rise when ETF filings started over the summer.
- The SEC has not yet approved any bitcoin ETFs. It previously rejected Grayscale’s bitcoin ETF attempt but a court overruled that decision.
- If bitcoin ETFs are allowed, ether ETFs would likely follow. Ether is the second largest cryptocurrency after bitcoin.
The proposed ETF would hold Ethereum’s native token, ether, and be listed on the Nasdaq exchange under the iShares brand. iShares, BlackRock’s ETF division, oversees over $2.3 trillion in assets, making it the largest ETF provider globally.
If approved, this would be the first Ethereum ETF in the U.S. It follows BlackRock’s previous filing for a bitcoin ETF over the summer, which has yet to be approved by the SEC.
The move signals growing acceptance of cryptocurrencies among the mainstream financial sector. BlackRock CEO Larry Fink has done an about-face on crypto lately, becoming a vocal advocate after previously expressing skepticism.
“Offering ETFs opens up crypto to more retail investors at a lower cost than buying the tokens directly,” said Mark Williams, a professor at Boston University. “This is a huge stamp of approval for Ethereum.”
Per the SEC filing, Coinbase will act as custodian for the ETF’s ether reserves. Coinbase already provides custody services to major institutional players like Tesla.
The proposed ETF aims to address concerns regarding market surveillance that have thus far kept the SEC from approving any crypto ETFs. BlackRock argues that CME’s regulated ether futures market closely tracks spot ether prices.
The ETF news catalyzed a sharp rally in ether, with prices rising 7% to over $2,000 per token – a level not seen since last April. Crypto watchers say interest in Ethereum has climbed due to its move toward a proof-of-stake model and growing use cases for Web3 apps.
While bitcoin ETF approval would likely come first, an Ethereum ETF could soon follow if the SEC gives the green light. This would open the door to greater mainstream adoption of crypto investing.
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