BlackRock Spot Ether ETF Again Delayed by SEC

The agency is seeking public comment on BlackRock's application to launch its second spot crypto fund.

LucyBrewster310x310
|
Finance Reporter
|
Reviewed by: etf.com Staff
,
Edited by: Ron Day

The Securities and Exchange Commission has again delayed BlackRock Inc.’s spot ethereum ETF application, extending their time to decide on the asset management giant’s proposal for an exchange-traded fund holding the second largest cryptocurrency.

The delay is the second since BlackRock filed to create the iShares Ethereum Trust in November. The agency first delayed its ruling in late January, when it also extended the review time for a similar application from Grayscale Investments.

Interest in crypto ETFs is surging as investors pouring billions into spot bitcoin funds helped push the price of the top cryptocurrency to an all-time high today. Ethereum, the No. 2 cryptocurrency by market capitalization, while gaining lately, remains about $1,000 less than its all-time high of $4,891.70, according to CoinMarketCap.

While the SEC greenlit ethereum futures funds in October, it's taken a more cautious approach to ETFs that own crypto and expose investors to the so-called spot market over concerns about market manipulation and fraud. A handful of firms, including Fidelity Investments, Bitwise Asset Management, Ark Invest, and Franklin Templeton, are seeking to create their own spot ethereum ETFs.

The decision to delay the ETF was largely expected by analysts, who foresee May as the date to watch for the SEC to make a final decision on the funds.

“The only date that matters for spot ethereum ETFs at this time is May 23,” Bloomberg ETF analyst James Seyffart wrote on Twitter/X after Invesco’s filing was punted in early February. May 23 is the final deadline for VanEck's spot ether fund. 

The SEC is also asking for the public to weigh in on "concerns about ether’s susceptibility to fraud and manipulation,” according to the filing.

Ethereum vs Bitcoin

Many cryptocurrency investors are hoping that after the watershed approval of ten trading spot bitcoin ETFs in January that spot ethereum funds could be just around the corner.

Yet while many analysts believe that the ether funds will eventually be approved, the path isn’t necessarily straightforward. A central issue that has yet to be settled is whether ethereum would be designated a commodity by the SEC, according to etf.com analyst Sumit Roy.

At the ETF Exchange conference in Miami in February, a group of executives including Bitwise Asset Management’s Matt Hougan, Galaxy’s Steve Kurz, and Grayscale’s David LaValle agreed on a spot bitcoin panel that there was about a 50% change that ethereum ETFs would be approved by their May deadline.

Commenters have 21 days to submit their thoughts to the SEC.

Ethereum, which is the second largest cryptocurrency, has seen its price surge in recent weeks on the coattails of bitcoin’s rise. The cryptocurrency is up 14% over the past week and nearly 3% over the past day, according to database CoinMarketCap.

Contact Lucy Brewster at [email protected].

Lucy Brewster is a finance reporter at etf.com covering asset managers, emerging technologies, and regulation. She hosts etf.com webinars and appears on Exchange Traded Fridays, etf.com’s flagship podcast. She previously was a finance fellow at Fortune Magazine where she covered markets, investment strategy, and venture capital. She has also been a freelancer writer at the publication Mergers & Acquisitions and a research fellow at the Historic Hudson Valley. 

She graduated from Vassar College in 2022 with a degree in History and was an editor of The Miscellany News, the college's award winning student run newspaper. 

Lucy lives in Brooklyn, NY, and in her free time she loves to run and find new recipes to cook.