Ethereum ETFs are coming: Blackrock files with NASDAQ
In a new filing with NASDAQ (PDF), asset management giant BlackRock revealed plans to launch an exchange-traded fund (ETF) based on the cryptocurrency Ethereum.
Main points
BlackRock has filed with the SEC to launch an Ethereum ETF that holds Ether. This follows the company's previous application for a Bitcoin ETF. The Ethereum ETF is listed on the Nasdaq under the iShares brand. Coinbase will be the custodian of Ether. CEO Larry Fink has become a vocal supporter after previously being a skeptic. Launching a crypto ETF widens access to average investors. The filing attempts to address the SEC's concerns about market tracking by arguing that CME Ether futures prices closely track the price of Ether. The price of Ether jumped after the news and topped $2,000 for the first time since April. This reflects bitcoin's growth as ETF filings begin in the summer. The SEC has yet to approve any Bitcoin ETF. He previously rejected Greyscale's bitcoin ETF attempt, but a court overturned the decision. If bitcoin ETFs are approved, ether ETFs may follow. Ether is the second largest currency after Bitcoin.
The proposed ETF will hold Ethereum's native token Ether and will be listed on the Nasdaq exchange under the iShares brand. iShares, BlackRock's ETF division, manages more than $2.3 trillion in assets, making it the largest ETF provider globally.
If approved, this would be the first Ethereum ETF in the US following BlackRock's earlier filing for a Bitcoin ETF over the summer, which has yet to be approved by the SEC.
The move demonstrates the growing acceptance of cryptocurrencies among the mainstream financial sector. BlackRock CEO Larry Fink recently made an about-face on crypto, becoming a vocal advocate after previously expressing skepticism.
“Offering ETFs opens up the tokens to retail investors at a lower cost than buying them directly,” said Mark Williams, a professor at Boston University. “This is a big stamp of approval for Ethereum.”
According to an SEC filing, Coinbase acts as a custodian for the ETF's Ether inventory. Coinbase already provides security services to major institutional players like Tesla.
The proposed ETF aims to address concerns regarding market surveillance that have so far prevented the SEC from approving any crypto ETFs. Blackrock argues that the CME-regulated ether futures market closely tracks the price of ether.
The ETF news fueled a massive rally in Ether, with its price rising 7% to more than $2,000 per token — a level not seen since last April. Crypto watchers say interest in Ethereum is driven by a move to a proof-of-concept model and growing use cases for Web3 applications.
While Bitcoin ETF approval may come first, an Ethereum ETF could soon follow if the SEC gives the green light. This opens the door for more crypto investment adoption.
