November 20, 2023
By Anjali Kochhar
In a groundbreaking move, BlackRock, the world’s largest asset manager, has submitted an application to the U.S. Securities and Exchange Commission (SEC) for the creation of an exchange-traded fund (ETF) dedicated to Ethereum. The proposed ETF, named the iShares Ethereum Trust, is designed to mirror the price movements of Ethereum, drawing parallels with the way gold prices are tracked by gold ETFs.
This strategic move comes on the heels of BlackRock’s recent filing for a spot bitcoin ETF, currently pending approval from the SEC. The filing reflects BlackRock’s anticipation of the SEC’s green light, signalling the firm’s commitment to navigating the evolving landscape of digital assets.
If approved, the Ethereum ETF could revolutionise mainstream access to cryptocurrency for investors, allowing seamless integration into traditional brokerage accounts. This development underscores BlackRock’s recognition of the maturing Ethereum market, with its current market capitalisation nearing an impressive $250 billion.
BlackRock CEO Larry Fink articulated the company’s perspective, stating, “There is pent-up interest in crypto from clients,” emphasising the growing demand among investors for exposure to the digital asset space.
The SEC’s historical reservations about cryptocurrency-related ETFs, rooted in concerns over volatility and potential market manipulation, add an air of anticipation to BlackRock’s latest move. While previous bitcoin ETF applications faced rejection, the filing for an Ethereum ETF implies BlackRock’s optimism about an imminent regulatory nod, demonstrating the company’s conviction in Ethereum’s long-term value proposition and regulatory trajectory.
The significance of an approved spot Bitcoin or Ethereum ETF extends beyond mere market dynamics. It holds the potential to unlock substantial institutional demand by providing much-needed regulatory clarity. BlackRock’s colossal size and influence within the financial sector may also play a pivotal role in swaying regulatory decisions toward approval.
As the SEC embarks on its evaluation process, it is expected to take several months before a decision is reached. Nevertheless, BlackRock’s bold step into the Ethereum ETF arena echoes the firm’s confidence in the cryptocurrency’s enduring utility, especially in powering decentralised finance applications and non-fungible token platforms, expanding Ethereum’s role beyond digital currency.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.