The Potential Launch of an Ethereum ETF and BlackRock’s Role
Yesterday, Larry Fink, the founder and CEO of BlackRock, expressed his belief that it is feasible to introduce an ETF based on Ethereum spot, even if the SEC were to categorize ETH as a security. Fink made these comments in a live appearance on Fox Business.
BlackRock’s Interest in an Ethereum ETF
- BlackRock is not only the launching pad for what could be the world’s largest Bitcoin ETF on US stock exchanges but also initiated a formal request with the SEC several months ago to unveil an ETF focusing on Ethereum spot.
- Despite holding an approval rating of over 99% for its ETF issuance applications, there are uncertainties regarding the SEC’s potential approval for this Ethereum ETF.
The SEC’s Consideration of ETH as Security
- The SEC views ETH as an unregistered security, signifying that its trading on US markets violates regulatory laws.
- Contrary to popular belief, the government agency cannot solely determine whether an asset qualifies as a security. In a recent court case involving XRP, the SEC’s classification of the asset as a security was refuted by the court.
ETH’s Status as a Security
- In the USA, securities must obtain approval from the SEC before being legally traded. ETH has not yet been categorized as such or requested approval from the SEC.
- Prior to the transition to Proof-of-Stake, Ethereum was traditionally considered a commodity akin to Bitcoin. However, the introduction of staking mechanisms has challenged this standpoint.
BlackRock’s Influence in Securing Approval for an Ethereum ETF
- BlackRock submitted its ETF application when the situation regarding Bitcoin spot ETFs started to resolve in mid-2023, coinciding with an approval rate of over 99% for the company’s ETFs.
- Speculations arose following Larry Fink’s recent statement, hinting at BlackRock’s proactive approach in addressing potential SEC rejections for the Ethereum ETF.
Price Trends of Ethereum
- Despite indications of the SEC’s probable rejection of ETF applications, the price of Ether, Ethereum’s native cryptocurrency, experienced significant growth from mid-October to March 2024.
- Following a bullish trend, the price surged from under $1,700 to nearly $4,100 before a minor correction brought it back to around $3,000.
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