Blackrock, the global leader in asset management, has presented a compelling case for the U.S. Securities and Exchange Commission (SEC) to authorize spot Ethereum exchange-traded funds (ETFs). The Nasdaq Stock Market, having submitted a request to the SEC to list and trade shares of Blackrock’s proposed spot ether ETF, asserts that such an approval would significantly bolster U.S. investor protection in the realm of cryptocurrencies.
Blackrock’s Stance on Spot Ether ETF Approval by the SEC
In a significant move, Blackrock has urged the SEC to sanction spot ether ETFs, including its own prospective offering. The Nasdaq Stock Market recently filed with the SEC for permission to list and trade shares of Blackrock’s spot ether ETF, named “Ishares Ethereum Trust,” a process initiated after the fund’s registration with the Delaware Division of Corporations.
Nasdaq’s filing revealed that Ishares Delaware Trust Sponsor LLC, an indirect subsidiary of Blackrock Inc., is the sponsor of Blackrock’s spot ether ETF. Moreover, Coinbase Custody Trust Company has been designated as the custodian of the Trust’s ether assets.
Nasdaq emphasized the necessity of an ETP (exchange-traded product) holding spot ETH, citing the risks U.S. investors face without such an option. They contend that the approval of a spot ETH ETP would be a crucial step in safeguarding U.S. investors in the cryptoasset domain.
The filing detailed that the analysis provided should be adequate for establishing that the CME ETH Futures market is a regulated market of significant size, relating to both the CME ETH Futures and the spot ETH market, warranting the proposal’s approval.
Nasdaq highlighted that the differences between the Investment Company Act of 1940 and the Securities Act of 1933, as well as the surveillance-sharing arrangements for the CME ETH futures market and the spot ETH market, do not significantly impact proposals for ETH-based ETF and ETP.
In Grayscale Investments v. SEC, the court criticized the SEC for its inconsistent stance, questioning why it approved bitcoin futures ETPs but rejected Grayscale’s request to convert its bitcoin trust into a spot bitcoin ETF. The SEC’s rejection order was consequently overturned by the court.
Following the SEC’s approval of nine ETH futures ETFs on Oct. 2, Nasdaq argues that the SEC should also approve ETPs that offer exposure to spot ETH, such as the Trust, given that these futures ETFs are priced based on the underlying spot ETH market.
Blackrock’s Broader Crypto ETF Ambitions
Additionally, Blackrock has filed an application with the SEC for a spot bitcoin ETF. CEO Larry Fink, acknowledging the strong demand and interest in cryptocurrencies, has expressed Blackrock’s commitment to democratizing access to crypto. He views cryptocurrencies, particularly BTC, as a hedge against inflation and currency devaluation.
As the SEC’s decision on spot ether ETFs remains pending, the question arises: Will the SEC soon approve a spot ether ETF? The community’s thoughts and opinions are welcomed in the comments section below.
Frequently Asked Questions (FAQs) about Ethereum ETF Approval
What is the purpose of Blackrock’s proposal to the SEC?
Blackrock has proposed to the U.S. Securities and Exchange Commission (SEC) the approval of spot ether exchange-traded funds (ETFs) to provide a regulated and safer investment option for U.S. investors interested in cryptocurrency assets.
How does the Nasdaq Stock Market fit into Blackrock’s Ethereum ETF proposal?
The Nasdaq Stock Market has filed with the SEC to list and trade shares of Blackrock’s spot ether ETF, named “Ishares Ethereum Trust,” thereby playing a pivotal role in bringing this product to the market.
What are the implications of approving a spot Ethereum ETF for U.S. investors?
Approval of a spot Ethereum ETF would mean providing U.S. investors with a regulated, less risky avenue for cryptoasset exposure, potentially enhancing investor protection in the crypto space.
What is the significance of the Grayscale Investments v. SEC case in the context of cryptocurrency ETFs?
In the Grayscale Investments v. SEC case, the court questioned the SEC’s inconsistent approval criteria, having approved bitcoin futures ETPs but not a spot bitcoin ETF proposed by Grayscale. This case highlights the ongoing regulatory challenges and debates surrounding cryptocurrency ETFs.
What is Blackrock’s broader vision in the cryptocurrency market?
Blackrock’s broader vision in the cryptocurrency market includes democratizing access to crypto through regulated products like ETFs, viewing cryptocurrencies as potential hedges against inflation and currency devaluation.
More about Ethereum ETF Approval
- Blackrock Ethereum ETF Proposal
- SEC and Cryptocurrency Regulation
- Nasdaq and Blackrock ETF Partnership
- Grayscale Investments v. SEC Case
- Cryptocurrency as an Inflation Hedge