Grayscale and BlackRock have updated their applications for Ethereum ETFs amidst delays from the SEC.
Introduction: In the midst of regulatory uncertainty and extended deliberation from the Securities and Exchange Commission (SEC), Grayscale Investments and BlackRock have taken decisive steps forward with their Ethereum exchange-traded fund (ETF) applications. Despite prevailing expectations of rejection, both entities are pushing ahead with their plans, signaling a continued commitment to the cryptocurrency market.
Grayscale’s Moves: On April 23, Grayscale submitted an S-3 registration statement to the SEC, signaling a significant advancement in its pursuit of converting the existing Grayscale Ethereum Trust into a spot ETF. This submission is deemed a critical milestone by Grayscale, complementing the earlier Form 19b-4 filing made by NYSE Arca. Additionally, Grayscale has also filed an S-1 registration statement for a mini Ethereum ETF, mirroring its strategy with the proposed mini Bitcoin ETF. However, neither of these mini ETFs has received approval from the SEC thus far.
BlackRock’s Developments: Meanwhile, BlackRock’s plans for an Ethereum ETF have also seen progress. Nasdaq recently amended BlackRock’s 19b-4 filing to incorporate a proposed rule change that would facilitate the listing and trading of shares for BlackRock’s iShares Ethereum Trust. Notably, the proposed update suggests a shift towards cash-based creation and redemptions, departing from the traditional in-kind mechanisms. This adjustment brings BlackRock’s proposed ETF in line with competing Ethereum ETF applications and previously approved spot Bitcoin ETFs.
Decision Timeline: With the SEC extending deadlines for several Ethereum ETFs in recent weeks, the industry is eagerly awaiting a decision expected to be rendered in May. However, sentiments surrounding the likelihood of approval are notably pessimistic. Bloomberg ETF analyst Eric Balchunas, who initially estimated a 70% chance of approval earlier in the year, has revised his prediction to a mere 25%. This downward revision underscores the growing skepticism regarding regulatory approval.
Market Predictions: Adding to the prevailing uncertainty, Polymarket reports an 11% chance of the SEC approving an Ethereum ETF by May 31, as represented by betting odds. This stark assessment reflects the prevailing skepticism within the market regarding the prospects of Ethereum ETFs gaining regulatory approval in the near term.
Conclusion: Despite the SEC’s prolonged deliberations and the prevailing pessimism surrounding Ethereum ETF approvals, Grayscale Investments and BlackRock remain steadfast in their pursuit of bringing Ethereum investment opportunities to mainstream investors. The forthcoming decision in May will undoubtedly have significant ramifications for the cryptocurrency market, shaping the landscape of digital asset investment products in the foreseeable future.
