According to the S-1 filing filed with the SEC, the iShares ethereum Trust is designed to mirror the performance of ethereum.
BlackRock Inc (NYSE: BLK), a leading investment asset management firm, has archived for a spot ethereum exchange-traded fund (ETF) with the United States Securities and Exchange Commission (SEC). This comes just a week after it registered the ETF called iShares ethereum Trust with the Delaware Division of Corporations, and almost six months after applying for the bitcoin equivalent, the iShares bitcoin Trust.
Notably, the iShares brand is associated with all of BlackRock’s ETF products.
ethereum Spot ETF: BlackRock takes the first step
According to the S-1 filing filed with the SEC, the iShares ethereum Trust is designed to mirror the performance of ethereum. American cryptocurrency exchange Coinbase Global Inc (NASDAQ: COIN) is the designated custodian of the underlying assets. Filing Form S-1 is one of the two-step processes involved in applying for spot ETFs.
For any ETF application to be successful, the applicant or potential ETF issuer must obtain approval from the US SEC’s Division of Trading and Markets in its 19b-4 filing and from the Division of Corporate Finance in its S-1 filing or prospectus.
In June, BlackRock started a “movement” with its bitcoin spot ETF application submitted to the US regulator. Due to its reputation and status in the traditional financial sector, many other institutional investors perceived the move as a renewal of hope. For many years, the SEC has not given the green light to any bitcoin spot ETF, constantly citing susceptibility to market manipulation, fraud, and many other reasons as an excuse.
BlackRock’s bitcoin ETF spot move prompted many major companies to similarly apply, signaling growing interest among traditional investors in the burgeoning cryptocurrency sector. It was only a matter of time before Fidelity Investments, WisdomTree, Invesco and Galaxy Digital, Valkyrie, VanEck and Bitwise joined the race to offer bitcoin ETFs.
A move toward spot ETF offerings
As applicants await the SEC’s decision on their bitcoin ETF applications, some of them have pivoted to spot ethereum ETFs. The recent court decision regarding Grayscale’s lawsuit with the SEC played a crucial role in the sudden rush to the ethereum spot ETF.
To put it in context, the regulator acknowledged Grayscale’s request to convert its ethereum Trust into a physically backed ETF, starting a journey in which some difference could be made.
Some cryptocurrency experts and advocates have expressed optimism towards a possible SEC approval. Eric Balchunas and James Seyffart, two ETF analysts at Bloomberg, say the odds of getting a timely approval of a bitcoin ETF from the SEC are now 90% after initially setting it at 65%. Galaxy Digital founder Mike Novogratz also agreed that timely approval of a bitcoin ETF is imminent and when it finally arrives, he sees the possibility of it boosting the price of bitcoin by 74%.
ARK Invest and 21Shares also filed to list an ethereum spot ETF in September. According to ARK Invest, the ETF would custody the assets at Coinbase Custody Trust Company. The trust sponsored by 21Shares has Delaware Trust Company as trustee.
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