BlackRock, with a 576-1 ETF approval record, is waiting for the SEC to approve an Ethereum ETF, following its success with Bitcoin ETFs. The crypto community is optimistic about the approval of the Ethereum ETF on May 23, spurred by BlackRock’s application and regulatory developments. SEC Chairman Gary Gensler expresses caution but does not rule out the innovation potential of cryptocurrencies within a compliance framework.
BlackRock, the world’s largest asset manager, with an unparalleled 576-1 record in exchange-traded fund (ETF) approvals, faces its next potential victory. The possible approval of a spot Ethereum ETF by the United States Securities and Exchange Commission (SEC).
This comes after the company, along with 13 institutional giants, celebrated the launch of the first spot Bitcoin ETFs in the United States on January 10, marking a monumental moment for cryptocurrency investors.
Ethereum Spot ETF Approval Looming
BlackRock’s foray into the Bitcoin ETF market bolstered confidence among cryptocurrency enthusiasts. With over $8 trillion in assets under management and a near-perfect track record, its support for cryptocurrency ETFs has catalyzed optimism. He subsequently hinted at greater acceptance and integration of digital currencies into the overall financial system.
The SEC’s nod for Bitcoin ETFs has sparked speculation in the cryptocurrency community about the fate of Ethereum ETFs. Particularly in light of BlackRock’s November 2023 filing for a spot Ethereum ETF. With the decision deadline set for May 23, the stakes are high.
Bloomberg Senior Analyst Eric Balchunas attributed a 70% approval chance to the Ethereum ETF. It reflected a cautiously optimistic outlook reinforced by recent regulatory developments:
“I see no reason for [the SEC] to deny [spot Ethereum ETFs] given that they have approved [forward Ethereum ETFs]. (…) It would be illogical and technically they could open themselves up to another lawsuit,” Balchunas said.
However, the path to approval is fraught with caution and regulatory scrutiny. SEC Chairman Gary Gensler’s recent statements highlight a cautious stance toward cryptocurrency investments. In fact, he emphasized the agency’s continued concern about the potential risks associated with Bitcoin and, by extension, other digital currencies.
SEC Position on Ethereum Spot ETFs
Despite approving Bitcoin ETFs, Gensler’s comments reflect a deliberate approach to regulation aimed at safeguarding investors against fraud and market manipulation, while recognizing the complexities of the cryptocurrency market:
“This is a field that has been plagued by fraud and manipulation, and look at all the bankruptcies. It is entity, after entity, after entity… We try to make sure as best as possible that there is no fraud or manipulation, but one of the challenges of the Bitcoin market is that there is a lot of trading on trading platforms that do not comply with our laws.”
Gensler’s skepticism extends to the broader cryptocurrency trading environment. He also highlighted the volatility of Bitcoin and questioned the usefulness of many cryptocurrencies. Still, its insistence on compliance suggests a regulatory framework that does not outright dismiss the innovation potential of cryptocurrencies.
As the May deadline approaches, whether Ethereum will follow in the footsteps of the Bitcoin ETF remains a topic of intense speculation. BlackRock’s request represents a litmus test for the SEC’s willingness to further integrate cryptocurrencies into regulated financial products.
With a 576-1 track record, BlackRock’s candidacy for an Ethereum ETF encapsulates the narrative of the cryptocurrency’s journey from the margins to the forefront of financial innovation.
By Leonardo Perez
