November 10, 2023 at 11:00 GMTModified date: November 10, 2023 at 11:00 GMT
November 10, 2023 at 11:00 GMT

BlackRock expands ETF plans to include Ethereum

A Nasdaq filing has confirmed BlackRock’s Ethereum ETF plans, which follows its interest to list a similar one for Bitcoin.

A Nasdaq filing has confirmed BlackRock’s Ethereum exchange-traded fund (ETF) plans, which follows its interest to list a similar one for Bitcoin. The world’s largest asset manager seeks to list the product which is under the name of corporate entity ‘iShares Ethereum Trust’.

iShares is the name of BlackRock’s ETF division and the filing states that it is registered in the state of Delaware. These were outlined in a comprehensive proposal by BlackRock which talked about the structure, purpose, and operational details of the Trust, seeking approval for its listing and trading on Nasdaq.

Coinbase Custody Trust Company will be the custodian for the Ether holdings. The Trust comes with the investment objective of reflecting the performance of the altcoin’s price, before the payment of the Trust’s expenses and liabilities. It would be an alternative method for investment exposure to the price of Ether through the public securities market.

As per the filing, the custodian will keep custody of all the Trust’s Ether, with a substantial portion in cold storage for security. It also illustrates 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 investment firm also has a market-surveillance pact with Coinbase, an agreement which would potentially act in favour of getting its ETF approved by the US Securities and Exchange Commission (SEC). BlackRock seemed to try and preempt possible SEC objections to this surveillance-sharing aspect, saying that it believes the prices for CME Group’s Ether futures, which already exists, closely match spot $ETH prices.

The filing added: “Either CME surveillance can detect spot-market fraud that affects both futures ETFs and spot exchange-traded products, or that surveillance cannot do so for either type of product. Having approved ETH futures ETFs in part on the basis of such surveillance, the Commission has clearly determined that CME surveillance can detect spot-market fraud that would affect spot ETPs, and the Sponsor thus believes that it must also approve spot ETH ETPs on that basis.”

BlackRock described Ethereum as a decentralised network that allows users to engage in commerce without needing to trust any participant or counterparty. The document also discussed the lack of a US regulated, exchange-traded vehicle for retail investors in the country to gain exposure to ETH.

The altcoin surged by over 10% daily on the back of this news. This took $ETH past its key price level of $2k, placing it on the green side of its chart. At the time of press, it was changing hands for $2,101, up by more than 17% weekly.

Last month, the investment firm’s iShares spot Bitcoin exchange-traded fund (ETF) took a step forward by being listed on the Depository Trust & Clearing Corporation (DTCC). This is often seen as a positive step for ETFs to pass through the SEC with an approval.

A green light 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 awaiting the commission’s review, including those from ARK Investment, Fidelity, and Valkyrie.