Sunday, June 16, 2024

BlackRock Filing Fuels Hope for Ethereum ETF Launch in June

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Ethereum ETF Launch in June: BlackRock Filing Fuels Speculation

The wait for a U.S.-based exchange-traded fund (ETF) directly tied to Ethereum (ETH) might be nearing its end. Analysts are optimistic about a potential launch by late June, following a key move by investment giant BlackRock.

BlackRock Files Updated S-1

On May 29, BlackRock updated its Form S-1 with the Securities and Exchange Commission (SEC) for its proposed iShares Ethereum Trust (ETHA). This filing is a crucial step towards launching an ETF, and came just a week after the SEC approved BlackRock’s 19b-4 filing related to the product.

Analysts like Bloomberg ETF analyst Eric Balchunas view the update as a positive sign. He believes it could be followed by similar filings from other issuers, potentially leading to a launch by the end of June. However, Balchunas acknowledges a July 4th launch as a more realistic timeframe, with an earlier date being a “long shot.”

BlackRock and SEC Working Together

Another Bloomberg analyst, James Seyffart, sees BlackRock’s updated S-1 as evidence of collaboration between issuers and the SEC. This suggests progress towards approving spot Ethereum ETFs, which directly track the price of ETH.

The updated S-1 also sheds light on the seed capital investor for the ETHA fund. This is the initial financial backing needed to launch the ETF and begin trading. The filing reveals that a BlackRock affiliate committed $10 million to purchase 400,000 shares at a price of $25 each.

Hashdex Withdraws Spot ETF Application

Interestingly, the same day BlackRock updated its S-1, another applicant, Hashdex, withdrew its bid for a spot Ether ETF. This came just a day after the SEC initially approved applications from BlackRock and eight other issuers.

Analysts are divided on the potential impact of a spot Ethereum ETF on the price of ETH. Some believe it could lead to new highs, driven by increased interest from Wall Street investors betting on the growth of Web3, a decentralized internet concept.

Others speculate on potential price pressure due to the conversion of the Grayscale Ethereum Trust (ETHE) into a spot ETF. This shift could lead to significant outflows from ETHE, potentially exceeding $110 million daily, as the discount between its price and the underlying ETH narrows.

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Author: Sb

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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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