Ethereum
Ethereum ETF approval possible tomorrow, keeping BlackRock’s 10-year approval streak alive
The SEC could approve an Ethereum spot ETF as early as this week, marking a significant shift in regulatory stance. Bloomberg analysts Eric Balchunas and James Seyffart increased their chances of 75% approval, compared to 25% previouslyciting recent discussions and the SEC’s request for revised 19b-4 filings by 10 a.m. Tuesday. This rapid development has led to a rush among applicants, including major players like BlackRock, Grayscale and Fidelity.
BlackRock, the world’s largest asset manager, has a strong track record with the SEC, with only one ETF application denied in 2014. That ETF, the BlackRock Total Return ETF, was initially rejected due to security concerns. transparency and alignment with its net asset value. (NAV). However, an updated version of this ETF, addressing the SEC’s concerns, went live in December 2023, just a month before Bitcoin ETFs were approved. This track record highlights BlackRock’s ability to successfully meet regulatory challenges.
The SEC’s decision regarding Ethereum ETFs has been highly anticipated, with deadlines for various applications approaching. Bloomberg terminal data sharing by James Seyffart lists ETFs awaiting approval, including those from VanEck, ARK 21Shares, Hashdex, Grayscale, Invesco Galaxy, Fidelity, Franklin and Bitwise. These applications have faced numerous delays, but recent push for revised filings suggests a potential breakthrough.
Bloomberg terminal of ETF candidates (James Seyffart)
Grayscale and BlackRock have been proactive in updating their apps. Grayscale filed a S-3 Registration Statement to convert its existing Ethereum Trust into a spot ETF and a S-1 for a mini Ethereum ETF. BlackRock’s Nasdaq amendment to its 19b-4 filing proposes cash creation and redemptions, aligning with other previously approved applications of Ethereum ETFs and Bitcoin ETFs.
The SEC’s cautious approach was influenced by concerns about market manipulation and the need for comprehensive market data on Ethereum. However, the approval of Bitcoin spot ETFs earlier this year, following a legal victory for Grayscale, and the launch of Ethereum spot ETFs in Hong Kong, have raised hopes of similar products for Ethereum. The SEC’s recent interactions with ETF issuers have been described as one-sided, with agency staff declining to comment substantively, leading to speculation about potential releases.
Despite these challenges, the crypto community remains optimistic, with Ethereum up 17% in the last 24 hours. Approval of a spot Ethereum ETF would provide investors with a regulated and accessible way to gain exposure to Ethereum, potentially increasing market liquidity and stability. The involvement of prominent asset managers like BlackRock and Fidelity adds credibility to these products, which could attract institutional investors and drive adoption of cryptocurrencies.
While not guaranteed, BlackRock’s long history of overcoming regulatory and product approval hurdles suggests the odds are in their favor this week. A Ethereum ETF Green Light would mark a new era for mainstream crypto mainstreaming.