November 16, 2023 at 16:48 GMTModified date: November 16, 2023 at 16:48 GMT
November 16, 2023 at 16:48 GMT

BlackRock takes the next step in filing spot Ether ETF

The world’s largest asset manager is progressing with its application of the iShares Ethereum Trust, filing a Form S-1 Registration Statement for the same with the SEC.

The world’s largest asset manager is progressing with its application of the iShares Ethereum Trust, filing a Form S-1 Registration Statement for the same with the US Securities and Exchange Commission (SEC).

This follows last week’s Nasdaq’s filing of a 19b-4 with the regulatory body for the approval for this spot Ether exchange-traded fund (ETF). This corporate registration of the name was seen as a confirmation of BlackRock’s Ethereum ETF plans.

It had revealed Coinbase Custody Trust Company to be the custodian for its Ether holdings. The custodian will keep custody of all the Trust’s Ether, with a substantial portion in cold storage for security. It also illustrated how the net asset value (NAV) of the trust will be calculated, which would be based on the total assets (including Ether and cash) minus total liabilities.

The latest filing defined the Trust as a Delaware statutory trust that issues shares representing fractional undivided beneficial interests in its net assets, primarily consisting of ether held by the custodian. It will be sponsored by iShares Delaware Trust Sponsor LLC, which is an indirect subsidiary of BlackRock, Inc.

The Trust aims to reflect the performance of the price of Ether before expenses and liabilities. It offers an investment alternative to direct Ether investment, simplifying the process and reducing operational burdens. The shares will be listed and traded on NASDAQ under a specified ticker symbol.

A Form S-1 is the initial registration form for new securities required by the SEC for public companies that are based in the US. Any security that meets the criteria must have an S-1 filing before shares can be listed on a national exchange.

The filing of the prospectus by BlackRock triggered the price of $ETH, making it jump nearly by 2% to $2,080. However, at the time of press, the altcoin was down by almost 1%, risking a fall below the key $2,000 price level.

BlackRock also awaits a decision from the SEC on its iShares spot Bitcoin ETF. Last month, it was seen being listed on the Depository Trust & Clearing Corporation (DTCC), which is often seen as a positive step for ETFs to pass through the SEC with an approval.

A pass from the regulatory watchdog would make BlackRock’s fund the first spot Bitcoin ETF to enter the market. However, there are multiple other spot cryptocurrency ETFs from asset managers awaiting the commission’s review, including those from ARK Investment, Fidelity, and Valkyrie.

Recently, cryptocurrency prices have been riding on bullish sentiments associated with a potential approval of these ETFs in the US. This was further augmented by court rulings against the SEC’s rejection of spot crypto ETF applications in the last few months.

In August, the District of Columbia Court of Appeals ruled in favor of Grayscale, overturning the SEC’s decision that initially denied the application to convert the Grayscale Bitcoin Trust into an ETF.

This move was seen to have the potential of opening up doors for the crypto industry to attract significant investments from everyday individuals. It also resulted in the filing of more Bitcoin ETFs from other firms.

However, as per the recent Wednesday filings, the regulatory watchdog has now delayed a decision on Hashdex’s application to convert its existing Bitcoin ETF into a spot vehicle. The world’s leading crypto asset manager Grayscale’s application for a new futures-based Ether ETF has also been met with the same fate.