The iShares Ethereum Trust, designed to reflect the performance of the price of Ether, could unlock billions from institutional investors.
BlackRock, the world’s largest asset manager, filed for a spot Ether exchange-traded fund with the U.S. Securities and Exchange Commission on Nov.. 15.
The ETF, named the iShares Ethereum Trust, is designed to reflect the performance of the price of Ether.
The move, which follows BlackRock’s application for a spot Bitcoin ETF, marks a significant step by the asset manager as it stands to become one of the main providers of crypto exposure for Wall Street. Approval of spot ETFs would be a positive sign for the broader crypto market, potentially unlocking billions from institutional investors.
The iShares Ethereum Trust was formed as a Delaware statutory trust on Nov. 9, with the primary purpose of owning Ether in exchange for shares issued by the Trust.
Each share represents fractional interest in the net assets of the Trust, which primarily consist of Ether held by Coinbase Custody Trust Company. The CME CF Ether Reference Rate from CF Benchmarks was proposed to be the ETF’s benchmark.
The shares will be listed and traded on NASDAQ under a yet-to-be-announced ticker symbol.
The filing for a spot ETF involves a two-step process requiring SEC approval from both the Trading and Markets division on its 19b-4 filing and the Corporate Finance division on its S-1 filing, or prospectus.
High Chance of Approval
Despite the SEC’s previous rejections of crypto spot ETFs citing the market’s insufficient size and maturity, market analysts predict high chances of approval for BlackRock’s spot Bitcoin and Ether ETFs, with Bloomberg analysts placing the odds at 90%.
The shift in sentiment comes after the D.C. Circuit Court of Appeals ruled in August that the SEC was “arbitrary and capricious” in its decision to reject Grayscale’s attempt to turn its Grayscale Bitcoin Trust into a spot ETF.
The potential approval of these ETFs could also attract more attention to Ethereum, especially in comparison to Bitcoin, which has enjoyed most of the mindshare among institutional investors. However, lack of staking rewards for holders could raise questions on the benefit of owning the ETF versus the asset itself.