BlackRock’s Ethereum Spot ETF Move Ignites Crypto Market Buzz

In the ever-evolving realm of cryptocurrency, a significant development has taken center stage—the pursuit of Ethereum Spot ETFs. Leading this charge is industry giant BlackRock. On the evening of November 10, the crypto market experienced a notable upswing as BlackRock officially disclosed its intentions to seek approval for the Ethereum Spot ETF, enlisting Coinbase as the custodian for the anticipated ETH holdings. Yet, BlackRock is not alone in this endeavor, as five other institutions have long been navigating the application process.

BlackRock's Ethereum Spot ETF Move Ignites Crypto Market Buzz

BlackRock’s Entry Sparks Ethereum Surge

On the night of November 10, the financial powerhouse BlackRock injected a wave of optimism into the cryptocurrency market. According to documents unveiled by Bloomberg analyst James Seyffart, BlackRock, in collaboration with Nasdaq, formally submitted the 19b-4 document to the Securities and Exchange Commission (SEC), outlining their proposal for the iShares Ethereum Trust—a groundbreaking Ethereum Spot ETF.

This revelation had an immediate impact on the Ethereum (ETH) market, propelling prices from $1,900 to breach the $2,000 mark on November 10 and ultimately reaching an impressive $2,100 with a surge of over 10% in a single evening.

Coinbase as the Designated Custodian

As outlined in BlackRock’s submission, the leading U.S. cryptocurrency exchange, Coinbase, is slated to act as the custodian for the ETH holdings tied to the proposed Ethereum Spot ETF. Handling the cash position will be an unnamed third party. Furthermore, BlackRock and Coinbase have entered into a regulatory sharing agreement, viewed by many as a pivotal factor for SEC approval of such ETFs.

Unpacking BlackRock’s 19b-4 Document

The term “BlackRock’s 19b-4 document” refers to a regulatory filing submitted to the SEC, specifically detailing BlackRock’s intentions to apply for the creation and listing of an Ethereum Spot ETF. This formal filing, mandated by the SEC for ETF approval, furnishes comprehensive insights into the proposed ETF, encompassing its investment objectives, strategies, risks, and other pertinent details. BlackRock, as a financial juggernaut, employs this document to formally request SEC approval to launch an ETF tracking Ethereum’s performance.

In the case of BlackRock’s Ethereum Spot ETF, the document may include particulars about custody arrangements for underlying Ethereum assets, regulatory compliance measures, and other critical facets mandated by the SEC for thorough evaluation.

Investors, regulators, and the general public can scrutinize the 19b-4 document to gain a deeper understanding of the proposed ETF’s structure, operations, and compliance with regulatory standards. The filing process is integral to the ETF approval journey, offering transparency and enabling the SEC to assess whether the ETF aligns with regulatory requisites and serves investors’ best interests.

Nate Geraci, President of The ETF Store, conducted a detailed analysis of key information within BlackRock’s 19b-4 document on the X platform. This includes insights into Grayscale’s legal victory and the assertion that SEC approval criteria for spot Ethereum ETFs should mirror those of Ethereum futures ETFs. These insights underscore the rationale behind launching an ETH spot ETF, particularly from legal and regulatory perspectives.

Other Players in the Ethereum Spot ETF Arena

While BlackRock commands attention, it’s vital to recognize that five other institutions were already on the Ethereum Spot ETF application journey. In early September, Ark Invest, founded by the esteemed investor Cathie Wood, and ETF issuer 21Shares jointly submitted the inaugural Ethereum Spot ETF application, named “ARK 21Shares ETHEREUM ETF.”

VanEck also made strides, submitting an S1 application for the Ethereum Spot ETF in May 2021. The associated exchange, Cboe BZX, followed suit by submitting the 19b-4 form on September 6.

Other institutions, such as Hashdex, adjusted their application strategies, while Invesco Galaxy Ethereum ETF and Grayscale Ethereum Trust (ETHE) sought transformative approvals.

Ethereum Spot ETF: Extensions and Upcoming Milestones

Review Extensions and Upcoming Milestones

VanEck, Ark 21Shares, and Invesco Galaxy witnessed SEC extensions for their Ethereum Spot ETF applications in early October. Simultaneously, the review deadline for Hashdex and Grayscale’s transformative applications aligns with the upcoming date of November 17, coinciding with the initial window for Bitcoin Spot ETF reviews. As of this article’s deadline, BlackRock’s application is yet to appear on the federal register.

Read more: SEC delays the approval of Bitcoin Spot ETF

Conclusion

With BlackRock’s entry marking a groundbreaking moment and a diverse array of institutions vying for Ethereum Spot ETF approval, the cryptocurrency market stands at the precipice of transformative changes. Stay tuned for continuous updates on this dynamic journey as the Ethereum Spot ETF race continues to captivate the crypto community.

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