The Nasdaq filing has confirmed BlackRock’s intention to establish an Ethereum ETF, signalling the asset management giant’s involvement in the crypto world. The proposed ETF would hold Ethereum’s native cryptocurrency, ether (ETH).
In response to this development, the price of ETH surged significantly, reaching its daily peak of approximately $2,100, marking a 3% increase just before the filing was disclosed. Although the price retracted by about half of that gain, it maintained an overall increase of about 9% compared to the preceding 24 hours.
Details of BlackRock’s plan emerged from a filing with Nasdaq, the chosen U.S. exchange for the product’s listing that is subject to regulatory approval. The filing revealed the registration of “iShares Ethereum Trust” in Delaware, aligning with BlackRock’s ETF division named iShares. Notably, BlackRock has been actively exploring the cryptocurrency space, not only with its Ethereum ETF endeavour but also by seeking approval for a Bitcoin ETF. This move is conducive to making cryptocurrency more accessible to the average investor. BlackRock’s CEO, Larry Fink, has notably shifted from prior scepticism to becoming a vocal supporter of cryptocurrencies.
The filing also outlined Coinbase, a U.S.-based crypto exchange, as the custodian for the ether held within the proposed ETF. Additionally, an unnamed third party will manage the cash. BlackRock’s existing market surveillance agreement with Coinbase is highlighted in the filing, emphasising the significance of such contracts in gaining approval from the U.S. Securities and Exchange Commission (SEC) for ETFs in the crypto space.
Anticipating potential SEC concerns regarding surveillance-sharing arrangements, the filing sought to address these issues preemptively. It argued that CME Group’s ether futures prices, which already have associated ETFs, closely mirror spot ETH prices. The filing contends that based on CME surveillance, the SEC’s approval of ETH futures ETFs establishes a precedent for approving spot ETH ETFs on similar grounds.