Blackrock has officially filed for an Ethereum ETF with the SEC, and may plan to later transform its iShares Ethereum trust into a spot ETF. The SEC has previously expressed concerns about potential fraud and manipulation in the spot cryptocurrency market, which means BlackRock’s ETF filing outcome is still uncertain. Meanwhile, the regulator has also delayed decisions on other ETF applications tied to Bitcoin and Ethereum, leaving the crypto community in a waiting game.
Blackrock Officially Files for an ETH ETF
The asset management giant, BlackRock, has formally filed for an Ethereum (ETH) exchange-traded fund (ETF) with the United States Securities and Exchange Commission (SEC). This ETF, known as the iShares Ethereum Trust, aims to mirror the overall performance of ether’s price.
This filing happened one week after BlackRock’s establishment of the iShares Trust entity, which was registered with the Delaware Department of State Division of Corporations. Shortly after, Nasdaq filed for the proposed ETF, which confirmed that the asset management firm is indeed working on an ETF for the altcoin leader.
BlackRock is also suggesting a transformation of the trust into a “spot” ETF, which means the fund will directly be holding ether rather than utilizing futures products linked to the token. Although the SEC has previously granted approval for crypto ETFs based on futures contracts, the regulatory body has consistently expressed concerns about the potential for fraud and manipulation within the spot cryptocurrency market. Taking this into consideration, only time will tell if the SEC will actually approve BlackRock’s ETF filing.
An Ethereum ETF Filing Has Not Done Much to the Price of ETH
Daily chart for ETH/USDT (Source: TradingView)
ETH has been in a negative trend over the past week, and printed a series of lower lows and lower highs during this period. As a result, a descending price channel has formed on the cryptocurrency’s daily chart.
This bearish phase saw ETH’s price drop from a peak of $2,126.99, which it reached on Nov. 10, to below the psychological mark at $2K. TradingView data showed that the altcoin’s value continued to trade below the $2K mark at press time as well. Furthermore, ETH was still trading within the negative price channel.
The leading altcoin was at risk of breaking below the descending price channel at press time, as it was trading near the channel’s lower level. If it breaks below this level in the next 24-48 hours, then traders may identify this as a bearish event. Consequently, ETH’s price could be at risk of testing the immediate support level at $1,915 in the next few days.
There is still the possibility that ETH’s price may rise heading into the weekend. Should bulls identify ETH’s current level as a buy opportunity, then it may rise back above the $2K threshold. Thereafter, investors and traders may rejoice and inject a wave of capital into ETH, which could lead to it embarking on a journey towards the $2,120 resistance level in the short term.
SEC Delays Its Decision on Grayscale and Hashdex’s ETF Applications
In related news, the SEC announced a delay in making a decision regarding Hashdex’s application to transform its existing Bitcoin futures ETF into a spot ETF. Additionally, the regulator has postponed its decision on Grayscale’s proposal to launch an Ethereum ETF.
In September this year, Hashdex filed a request to convert its Bitcoin futures ETF into a spot Bitcoin ETF, while Grayscale filed for its Ethereum futures ETF in the same month. Initially, both of these applications had a deadline of Nov. 17, but the SEC has now extended its timeframe for making its decision.
A Waiting Game
In 2023, over a dozen companies have submitted applications to launch spot Bitcoin ETFs, and several of these are seeking approval for similar products now tied to Ethereum. However, the SEC has not yet signaled how it will ultimately decide on these recent applications.
In the past, most ETF rejections were based on fears of manipulation in the Bitcon market and the absence of agreements for sharing surveillance data, among many other issues. On the other hand, those who have applied for ETFs argue that these concerns have already been addressed or are no longer relevant, especially given the fact that Bitcoin futures ETFs have been approved on occasion. Despite this, the SEC has still postponed making its final call on these new applications.
There Is Still Hope
Cathie Wood, the CEO of ARK Invest, has expressed a sense of cautious optimism with regards to the SEC possibly approving a Bitcoin spot ETF. She pointed out the fact that the SEC is now asking more comprehensive and in depth questions to ETF applicants, which could be a sign of the regulator’s potential shift towards approval.
There could, however, still be a few bumps in the road as Wood pointed out that a rejection of Grayscale’s Bitcoin ETF could lead to them suing the SEC. As a result of this, all Bitcoin ETF approvals could be halted.
Nevertheless, Wood believes the likelihood of eventual approval for spot Bitcoin ETFs are higher than ever. The fact that the SEC is engaging in more in-depth discussions with ETF applicants suggests a genuine consideration of these proposals. Furthermore, amendment filings made by ETF applicants like GlobalX indicate positive momentum towards potential approval.