Crypto

BlackRock's audacious step global financial behemoth files for Ethereum ETF Spot

The massive asset management company BlackRock (BLK.N) increased its cryptocurrency wagers on Thursday by formally filing for a spot Ethereum exchange-traded fund (ETF) in the hopes that these investment vehicles will be approved by investors. This week, the iShares Ethereum Trust was registered. Should it be approved, it will be listed on Nasdaq, providing investors with access to the second most popular cryptocurrency, ether, without really holding any of it.

The trust would instead own ether rather than futures contracts linked to the cryptocurrency token, according to BlackRock's proposal to transform it into a "spot" ETF. The U.S. Securities and Exchange Commission (SEC) has previously approved futures-based crypto exchange-traded funds (ETFs). However, the regulator has long maintained that there is a high risk of fraud and manipulation in the spot crypto market. However, a federal appeals court decided in August that the SEC erred in rejecting Grayscale Investments' proposal to establish a spot bitcoin exchange-traded fund (ETF).

Following multiple high-profile crashes in the cryptocurrency space last year, the historic victory for Grayscale has invigorated businesses that have recently applied for these investment vehicles and helped regain some of the public's trust. By applying a spot bitcoin ETF in June, BlackRock took a tentative step into the cryptocurrency world. According to its most recent filing, the Wall Street giant wants to go beyond Bitcoin, which is now the most well-known cryptocurrency globally.

The business will compete for market share with established financial behemoths like Invesco (IVZ.N) as well as homegrown cryptocurrency players like Grayscale and Valkyrie. The ether of the proposed ETF will be held in custody by Coinbase Custody, a division of Coinbase (COIN.O), a cryptocurrency exchange. The business is also the front-runner to handle BlackRock's bitcoin exchange-traded fund. A request for further comment from BlackRock was not immediately answered.