SEC Delays Decision on BlackRock's Ethereum ETF Application Again

07. Mar 2024 Posted by Bailey S. on News

The decision regarding BlackRock, Inc.'s application for a spot Ethereum exchange-traded fund (ETF) has once again been postponed by the U.S. Securities and Exchange Commission (SEC). This delay marks the second instance, following an initial postponement in January, subsequent to the approval of spot Bitcoin ETFs.

The SEC has initiated comment periods to gather input on the application under review. They seek to evaluate whether the arguments supporting the approval of spot Bitcoin ETFs also apply to Ether ETFs. Additionally, the SEC is soliciting feedback on the susceptibility of spot Ether ETFs to manipulation, and the comparison between spot and futures Ether exchange-traded products.

A final decision on Ether ETF applications is anticipated to be reached by May 23.

BlackRock filed for a spot Ethereum ETF, iShares Ethereum Trust, in November 2023. This filing coincided with a surge in Ethereum's price to its peak level for the year, followed by a subsequent pullback.

Spot crypto ETFs mirror the market price of the underlying digital asset, providing investors exposure to the token without direct ownership. In the case of an Ethereum ETF, investors would track Ethereum's spot price rather than investing in companies involved in the Ethereum ecosystem.

While the SEC has historically cautioned against risks associated with the largely unregulated crypto markets, the approval of spot Bitcoin ETFs signals a shift in investor sentiment and trading practices towards cryptocurrencies.

Franklin Resources, Inc. recently joined seven other firms in filing for a spot Ethereum ETF, following suit with the trend initiated by the introduction of spot Bitcoin products in January.

BlackRock's earlier filing for a spot Bitcoin ETF in June 2023 paved the way for subsequent filings by asset managers such as Fidelity, Invesco, and WisdomTree. Despite this activity, BlackRock's shares have experienced a more modest growth of 19.7% over the past six months, compared to the industry's 24.9% growth.