The Securities and Exchange Commission (SEC) has extended the decision-making process regarding BlackRock’s proposal for a spot Ethereum exchange-traded fund (ETF) until March 10, 2024, according to an update on the SEC website. Initially scheduled for January 25, the delay is attributed to the SEC’s desire for a more comprehensive assessment of the proposal and related concerns.
BlackRock, the world’s largest fund manager, had submitted its application for the spot Ethereum ETF in November, signaling a strategic move into the cryptocurrency market. The SEC’s decision follows the recent approval of nearly a dozen spot Bitcoin ETFs, with BlackRock’s spot Bitcoin ETF gaining approval on January 10 and commencing trading the following day.
In a CNBC interview, BlackRock’s CEO, Larry Fink, highlighted the value he sees in having an Ethereum ETF, emphasizing that its approval would signify significant progress in the realm of tokenization. Fink’s perspective aligns with the broader trend of financial institutions recognizing and embracing the potential of cryptocurrency-based investment products.
The approval of spot Bitcoin ETFs by the SEC on January 10, including BlackRock’s iShares Bitcoin Trust, has proven successful, accumulating $1.7 billion in assets under management. However, the delay in the decision on BlackRock’s spot Ethereum ETF introduces a level of uncertainty, especially as other major players like Fidelity also await SEC decisions on their respective Ethereum ETF applications.
Notably, on January 19, the SEC decided to defer its decision on Fidelity’s application for a spot Ethereum ETF, setting a new deadline for March. This further underscores potential challenges and uncertainties in the regulatory landscape surrounding Ethereum-based investment products.
Despite BlackRock’s CEO expressing optimism, JPMorgan Chase remains skeptical about the SEC approving such funds in the spring of 2024. The skepticism is rooted in concerns about regulatory complexities, including potential involvement from the Commodity Futures Trading Commission (CFTC), particularly if SEC Chairman Gary Gensler pursues increased regulation of Ethereum. Bloomberg Intelligence ETF analyst James Seyffart anticipates ongoing delays, emphasizing that regulatory challenges may outweigh the perceived benefits of spot Ethereum ETFs.
Spot Ethereum ETF Delays will continue to happen sporadically over the next few months. Next date that matters is May 23rd https://t.co/2zBBvHkrVk
— James Seyffart (@JSeyff) January 24, 2024