The world’s largest asset manager is seeking to list the first-ever spot Ethereum exchange-traded fund (ETF).
Filings from the Delaware Division of Corporations shows that BlackRock registered an iShares Ethereum Trust on Thursday, later submitting a 19b-4 filing with the Nasdaq. The firm’s iShares product ranks as one of the leading ETFs worldwide, managing over $2 trillion in assets under management (AUM).
News of BlackRock filing its spot ETH ETF sparked a rally in cryptocurrency, surging Ethereum prices on Thursday by 7% to top over $2,000, with similar jumps in bitcoin that rose the crypto to its highest level in 18 months.
Digital asset strategists applauded the move by BlackRock, noting that the application by the large asset manager, along with prior approval from the Securities and Exchange Commission (SEC) on bitcoin and Ethereum futures ETFs, signals a shift towards embracing crypto assets.
“Given the SEC had approved both Bitcoin and Ethereum Futures-based ETFs, it makes sense that following any approval of a spot Bitcoin ETF by the SEC, approval of a spot Ethereum ETF would follow closely,” said Bradley Duke, chief strategy officer at ETC Group, a European provider of exchange-traded products (ETPs) on cryptocurrencies. “We fully expect this to be the first, not the only Ethereum Spot ETF application and investment managers should be focusing on crypto assets ahead of expected approvals.”
BlackRock had also previously applied for a spot bitcoin ETF back in June, which is now pending SEC approval alongside 11 other spot Bitcoin ETF filings, including Grayscale’s conversion product.
“With a behemoth like BlackRock entering the picture, it reinforces the message I’ve been telling advisors all along, that crypto is here to stay.”
Steve Larsen, Defi Steward
Victoria Bills, chief investment strategist with Banríon Capital Management, a firm dedicated to helping financial advisors incorporate alternative investments into client portfolios, expects the SEC to approve BlackRock’s filing, along with others, in 2024.
She adds that the filing could also push other institutions to introduce and file spot ETFs. “Many institutions want to capitalize on the high return and inverse correlation to the stock market,” Bills tells 401(k) Specialist.
Steve Larsen, founder of Defi Steward, a platform for investment advisors offering portfolio management for digital assets, notes a similar viewpoint: “With a behemoth like BlackRock entering the picture, it reinforces the message I’ve been telling advisors all along, that crypto is here to stay,” he says to 401(k) Specialist. “Now, institutions from the Beltway to Wall Street are accepting that reality; that’s what we’re seeing playing out right now. If this were a movie, we’re just now entering the point where the plot is thickening, and the drama is intensifying.”
Spot bitcoin and Ethereum-based ETFs would expose ordinary individuals, along with institutions and retirement plans, to the crypto market without needing to hold or trade cryptocurrency. As a result, it could open the door for investors to familiarize themselves with cryptocurrencies without needing to go through the technical adjustments of owning bitcoin or Ethereum.
However, the ETFs could still come with their share of market volatility, along with regulatory skepticism and security risks against cybercriminals, all risks that have deterred the SEC, along with retirement plan advisors, from supporting its advancement in the past.
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