BlackRock CEO Bullish on Spot Ethereum ETF After Bitcoin Fund’s Success

Following the success of BlackRock Spots Bitcoin Exchange Traded Fund (ETF), CEO Larry Fink has expressed hopes for a similar fund for Ethereum. “I see there is value in having an Ethereum ETF,” Fink said in an interview Friday. His comments come after the BlackRock Spot Bitcoin ETF (IBIT) collected more than $1 billion in trading volume on its first day Thursday.

Main points

BlackRock CEO Larry Fink sees Ethereum ETF prices in one place following the successful launch of the company's Bitcoin ETF product (IBIT). BlackRock has filed for an Ethereum ETF in November 2022, with tentative approval expected by May 2023. The BlackRock Bitcoin ETF (IBIT) reached $1.05 billion in trading volume on its first day. Fink believes asset tokenization is the future, saying blockchain technology can help eliminate corruption. Several major asset managers such as BlackRock, Ark Invest, VanEck and Fidelity have offered spot Ethereum ETFs.

Industry observers expect BlackRock's proposed Ethereum ETF to receive approval as early as May. The firm proposed the fund in November 2022, perhaps spurred by the Securities and Exchange Commission's (SEC) green light of interim Bitcoin ETFs after years of opposition.

Like its Bitcoin counterpart, BlackRock's proposed Ethereum Trust maintains assets on Coinbase. The world's largest asset manager seems intent on being at the vanguard of bringing cryptocurrency into the mainstream investment world.

@BlackRock's Larry Fink: 1) There is value in the #Ethereum ETF2) is a token of financial futures

– Bill Hughes: wchughes.eth ???? (@BillHughesDC) January 12, 2024

Fink emphasized his belief that asset tokenization is the future of finance. “These are just steps to the tokenization and I believe this is where we are going,” he commented. With blockchain's programmable, fractional ownership, the technology “eliminates all corruption” compared to traditional systems, he said.

Beyond BlackRock, major financial players such as Fidelity, Ark Invest, VanEck and others have filed Ethereum ETF applications with the SEC. The first date of hearing on the application is May 23 for Arch and 21 for Sher. Decisions on BlackRock and Fidelity will be made by the middle of the year.

Industry analyst Eric Balchunas puts 70% odds on a spot Ethereum ETF in May. Investors seem to agree, with prediction platform Polymarket showing 58% of bets expect such confirmation by then.

Price action shows that the market has great potential. With 2023 off to a slow start for Ethereum, speculation around ETFs has helped fuel Ether's 13% gain over the past two weeks. Meanwhile, Bitcoin is only 3.7% over the same period as it begins to focus on more diversity in crypto investment options.

Fink explained that while Bitcoin offers a new type of “digital gold” store of value, platforms like Ethereum greatly expand the possibilities. Smart contract networks “program” all kinds of financial assets to be represented and traded on the blockchain. This opens up a whole new realm of token securities with 24/7 on-chain efficiency.

The case for institutional investment is strengthened as Ethereum moves to a more energy-efficient proof-of-stake consensus and offers cost-cutting improvements.

Observers speculate that a successful Ethereum space ETF could bring new mainstream capital into the crypto markets. If asset tokenization through blockchain begins to disrupt traditional finance, Ethereum looks like a critical infrastructure.