WASHINGTON, Tuesday, April 30, 2024 – The U.S. Securities and Exchange Commission (SEC) is seeking public comment on changes made to BlackRock’s proposed spot Ethereum exchange-traded fund (ETF).1
“Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act,” SEC said in the filing.
Read more on U.Today.
This move follows the SEC’s earlier delay in making a decision on the application, originally filed in November 2023. 2
The SEC is inviting public comments on the revised proposal within a 21-day timeframe from the announcement.
The SEC has until May 23 to finalize decisions on several ETF applications.
Currently, Bloomberg’s ETF analyst, Eric Balchunas, has revised his probability forecast for the approval of these ETFs by May, lowering it from approximately 70% to 25%.
Meanwhile, Standard Chartered has shifted its initial optimistic outlook, now viewing the likelihood of Ethereum ETFs receiving SEC approval in May as relatively low. This change in sentiment stems from the lack of published constructive dialogue between the SEC and ETF applicants, which previously signaled the approval of Bitcoin ETFs. 3
BlackRock, the world’s largest asset manager, seeks to launch an ETF that directly tracks the price of Ethereum, the second-largest cryptocurrency by market capitalization.
The amended proposal outlines changes to the creation and redemption process of the ETF. Unlike the initial proposal that involved direct exchanges of Ethereum, the revised version focuses on a cash-based model.
This shift towards cash settlements aligns with the approach taken in recent approvals of Bitcoin ETFs.
The SEC may be exploring similar regulations for Ethereum ETFs, seeking to address potential concerns about the underlying asset and market structure.
The amended filing diverges from the original by specifying a cash-based redemption model instead of involving ether directly.
Notably, staking is not addressed in BlackRock’s revision, contrasting with other firms’ proposals. Despite initial optimism, the likelihood of SEC approval for a spot Ethereum ETF has decreased, as evidenced by lowered estimates from industry analysts.
Additionally, the SEC has extended its decision timeline for other ETF proposals to June.
- SEC Opens Public Comment On BlackRock: https://www.sec.gov/files/rules/sro/nasdaq/2024/34-100016.pdf[↩]
- SEC Opens Public Comment On BlackRock: https://www.sec.gov/Archives/edgar/data/2000638/000143774923032233/iset20231114_s1.htm[↩]
- SEC Opens Public Comment On BlackRock: https://coingape.com/sec-opens-comment-period-for-revised-blackrock-ethereum-etf/[↩]
