Blackrock Calls for SEC Approval of Spot Ether ETF
According to Blackrock, the world’s largest asset manager, the U.S. Securities and Exchange Commission (SEC) should approve spot ether exchange-traded funds (ETFs). Nasdaq Stock Market filed with the SEC to list and trade shares of Blackrock’s spot ether ETF called “Ishares Ethereum Trust” last week after the asset manager registered the fund with Delaware’s Division of Corporations.
In its SEC filing, Nasdaq Stock Market LLC detailed that the sponsor of Blackrock’s spot ether ETF is Ishares Delaware Trust Sponsor LLC, an indirect, wholly owned subsidiary of Blackrock Inc. In addition, Coinbase Custody Trust Company is the custodian for the Trust’s ether holdings.
Nasdaq believes that the lack of an ETP that holds spot ETH exposes U.S. investor assets to significant risk because investors are forced to find alternative exposure through generally riskier means. The approval of a spot ETH ETP would be a major win for the protection of U.S. investors in the cryptoasset space.
Nasdaq Stresses Importance of Approval
The exchange emphasized that both the exchange and the sponsor believe that this proposal and the included analysis are sufficient to establish that the CME ETH Futures market represents a regulated market of significant size as it relates both to the CME ETH Futures market and to the spot ETH market and that this proposal should be approved. Nasdaq also noted that in a recent case, Grayscale Investments v. SEC, the court found that the securities regulator had failed to explain why it approved bitcoin futures ETPs but disapproved Grayscale’s proposal to convert its bitcoin trust (GBTC) to a spot bitcoin ETF. The court subsequently vacated the SEC’s disapproval order.
SEC Approval Should Also Apply to Spot Ether ETPs
Nasdaq stated that on Oct. 2, 2021, the SEC approved nine ETH futures ETFs for trading. Given this approval, Nasdaq believes that the Commission must also approve ETPs that offer exposure to spot ETH, like Blackrock’s Ishares Ethereum Trust.
Blackrock’s Application for a Spot Bitcoin ETF
Blackrock also has an application with the SEC for a spot bitcoin ETF. In October 2021, CEO Larry Fink said there is strong demand and pent-up interest in crypto. He previously said that crypto will “transcend any one currency,” and that Blackrock seeks to democratize crypto. Fink also sees BTC as a hedge against inflation and currency devaluation.
Hot Take: Spot Ether ETF Approval is Crucial for U.S. Investors
The approval of a spot ether exchange-traded fund is essential for safeguarding U.S. investors who seek exposure in the cryptocurrency space. According to Blackrock and Nasdaq, such approval would mitigate risks currently faced by investors and ensure greater protection in an increasingly popular investment area.
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