SEC Opens Public Review of BlackRock’s Spot Ethereum ETF Proposal
The US Securities and Exchange Commission (SEC) has initiated a public commentary period for the recent amendments to BlackRock’s proposal for a spot Ethereum exchange-traded fund (ETF). Nasdaq submitted a revised proposal on April 19 to align more closely with regulatory expectations.
BlackRock’s iShares Ethereum Trust Under the Magnifying Glass
BlackRock’s ETF, known as the iShares Ethereum Trust, aims to track Ethereum’s price accurately. Initially submitted in November 2023, the proposal has undergone changes in its structure, particularly in its creation and redemption processes. The original plan involved direct Ethereum exchanges, but the revised version suggests a cash-based transaction model.
- The shift to a cash redemption strategy reflects cautious regulatory actions, reminiscent of the discussions surrounding spot Bitcoin ETFs last year.
Regulatory Precedents and Ethereum ETFs
The approval of cash transactions for Bitcoin ETFs in January may set a similar precedent for Ethereum ETFs. The revision of BlackRock’s proposal aligns with a regulatory trend favoring cash-based models over direct asset exchanges.
- Stakeholders and the public have 21 days to provide input on the proposal, influencing the SEC’s final decision.
Roadblocks and Skepticism in the Crypto ETF Landscape
Despite modifications to Ethereum ETF applications from Fidelity and Grayscale, skepticism remains prevalent among market analysts. Bloomberg’s Eric Balchunas has lowered the odds of Ethereum ETF approval by May, citing a lack of positive indicators.
“We are holding the line at 25% odds, although, to be honest, it is a very pessimistic 25%. The lack of engagement seems to be purposeful vs procrastination. No positive signs or intel anywhere you look. I personally hope they do approve it, but it just ain’t looking good,” Balchunas said.
SEC’s Thorough Approach to Cryptocurrency Approvals
As the SEC evaluates various cryptocurrency proposals from entities like Franklin Templeton and Grayscale, it maintains a methodical approach emphasizing regulatory scrutiny and stakeholder engagement in the decision-making process.
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