On Thursday, BlackRock, an asset manager managing $9 trillion, formally submitted an S-1 application for its Spot Ethereum ETF. BlackRock will offer Spot Ethereum ETF services to institutional clients and enter the cryptocurrency market, pending approval. A surge in fresh investments may inundate the digital assets market due to the probable approval of the Ethereum ETF by the United States Securities and Exchange Commission (SEC).
This action follows the corporate registration of name last week and the Nasdaq’s 19b-4 filing with the SEC in an effort to obtain approval for the spot ETF. In response to the S-1 filing, the price of ether (ETH) surged by approximately 2% to $2,080; however, it has since reverted back to its pre-news level.
The asset manager states in the filing that the Trust “seeks to generally reflect the performance of the price of ether,” with its cryptocurrency holdings being custodianed by the cryptocurrency exchange Coinbase. The asset manager’s application for a spot Bitcoin ETF in June 2023, which shook the crypto and TradFi communities and sparked a crypto market rally that propelled Bitcoin to its current price of nearly $38,000, preceded BlackRock’s Ethereum ETF filing. The SEC has thus far denied all applications for spot Bitcoin exchange-traded funds.
The ETF issuer must obtain SEC approval from the Trading and Markets division on its 19b-4 filing and the Corporate Finance division on its S-1 filing or prospectus in order to file for a spot ETF. This is a two-step process. Early in November 2023, when the SEC approved Grayscale Investment’s application to convert its Ethereum trust into an ETF, the spot Ethereum ETF stampede commenced. During the previous bull cycle, numerous institutional titans also submitted applications for crypto spot ETFs, only to be denied by the SEC on the grounds that the crypto market was too small to support spot crypto ETFs.