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BlackRock (BLK) Seeks Crypto Expansion, Files for Ethereum ETF
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BlackRock, Inc. (BLK - Free Report) expands cryptocurrency exposure as the firm files for a spot Ethereum exchange-traded fund (ETF), named iShares Ethereum Trust, with U.S. Securities and Exchange Commission (SEC). The filing was submitted by Nasdaq exchange on behalf of the asset manager.
Following the announcement of this filing, the price of Ethereum surged to its highest level this year before pulling back afterward.
The Ethereum ETF, if approved, will be the first of its kind in the United States, allowing investors to gain exposure to Ethereum without having to purchase the cryptocurrency directly.
The ETF would track the spot price of Ethereum, meaning that investors would be investing in the price of Ethereum itself rather than in a company that is involved in the Ethereum ecosystem.
The move by BLK has once again injected optimism into the crypto markets while initiating discussions around SEC’s regulatory approach to cryptocurrency-based ETFs.
The jump in the price of Ethereum is similar to Bitcoin rally experienced this June when BLK had filed an application with SEC to offer a spot Bitcoin ETF.
In July, SEC said that the applications filed by BLK and other asset managers for spot Bitcoin ETF were inadequate because the filings did not have enough detail with respect to the “surveillance-sharing agreements”. BLK’s Bitcoin ETF is expected to be approved by SEC by the first quarter of 2024.
Notably, in June, BLK became the first asset manager to file for the spot Bitcoin ETF, paving the way for a wave of filings by other asset managers like Fidelity, Invesco (IVZ - Free Report) and WisdomTree (WT - Free Report) .
The applications had come at a time when the cryptocurrency industry was already battling criticism by SEC over alleged securities law violations.
Coinbase and the world’s largest crypto exchange, Binance, were already sued by SEC, alleging securities violations.
Thus, SEC had proposed new custody rules that would place additional responsibilities on asset managers to make sure that customers’ assets were kept in properly segregated accounts.
In October 2021, IVZ withdrew its original application for a Bitcoin ETF (made earlier in 2021) because of regulatory headwinds within the industry. At that time, SEC was resistant in approving such funds due to concerns over potential fraud and market manipulation.
Likewise, in October 2022, WT’s application for the launch of the WisdomTree Bitcoin Trust was not approved by SEC on account of insufficient investor protection.
However, the fact that BLK is filing for a spot Ethereum ETF, following an application for a spot Bitcoin ETF, shows that this asset manager wants to expand its presence in the cryptocurrency markets, signaling a shift in the regulatory landscape.
Over the past six months, shares of BLK have gained 2.6% compared with the industry’s 8.9% growth.
Image: Bigstock
BlackRock (BLK) Seeks Crypto Expansion, Files for Ethereum ETF
BlackRock, Inc. (BLK - Free Report) expands cryptocurrency exposure as the firm files for a spot Ethereum exchange-traded fund (ETF), named iShares Ethereum Trust, with U.S. Securities and Exchange Commission (SEC). The filing was submitted by Nasdaq exchange on behalf of the asset manager.
Following the announcement of this filing, the price of Ethereum surged to its highest level this year before pulling back afterward.
The Ethereum ETF, if approved, will be the first of its kind in the United States, allowing investors to gain exposure to Ethereum without having to purchase the cryptocurrency directly.
The ETF would track the spot price of Ethereum, meaning that investors would be investing in the price of Ethereum itself rather than in a company that is involved in the Ethereum ecosystem.
The move by BLK has once again injected optimism into the crypto markets while initiating discussions around SEC’s regulatory approach to cryptocurrency-based ETFs.
The jump in the price of Ethereum is similar to Bitcoin rally experienced this June when BLK had filed an application with SEC to offer a spot Bitcoin ETF.
In July, SEC said that the applications filed by BLK and other asset managers for spot Bitcoin ETF were inadequate because the filings did not have enough detail with respect to the “surveillance-sharing agreements”. BLK’s Bitcoin ETF is expected to be approved by SEC by the first quarter of 2024.
Notably, in June, BLK became the first asset manager to file for the spot Bitcoin ETF, paving the way for a wave of filings by other asset managers like Fidelity, Invesco (IVZ - Free Report) and WisdomTree (WT - Free Report) .
The applications had come at a time when the cryptocurrency industry was already battling criticism by SEC over alleged securities law violations.
Coinbase and the world’s largest crypto exchange, Binance, were already sued by SEC, alleging securities violations.
Thus, SEC had proposed new custody rules that would place additional responsibilities on asset managers to make sure that customers’ assets were kept in properly segregated accounts.
In October 2021, IVZ withdrew its original application for a Bitcoin ETF (made earlier in 2021) because of regulatory headwinds within the industry. At that time, SEC was resistant in approving such funds due to concerns over potential fraud and market manipulation.
Likewise, in October 2022, WT’s application for the launch of the WisdomTree Bitcoin Trust was not approved by SEC on account of insufficient investor protection.
However, the fact that BLK is filing for a spot Ethereum ETF, following an application for a spot Bitcoin ETF, shows that this asset manager wants to expand its presence in the cryptocurrency markets, signaling a shift in the regulatory landscape.
Over the past six months, shares of BLK have gained 2.6% compared with the industry’s 8.9% growth.
Image Source: Zacks Investment Research
Currently, BlackRock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.