In a significant development for cryptocurrency investment vehicles, Blackrock Inc., through its subsidiary Ishares Delaware Trust Sponsor LLC, has filed a 19b-4 form with the U.S. Securities and Exchange Commission (SEC) to list shares of the Ishares Ethereum Trust on the Nasdaq.
Blackrock Dives Deeper Into Crypto With Ethereum ETF Plan Amid Regulatory Clarity
After registering its Ishares Ethereum Trust with the Division of Corporations in Delaware, the world’s largest asset manager submitted a 19b-4 registration to the U.S. securities regulator. The initiative could provide U.S. investors with a regulated spot exchange-traded fund (ETF) to track the price of ethereum (ETH). The trust is designed to mirror the performance of ethereum’s price, accounting for expenses and liabilities.
The proposed Ishares Ethereum Trust will issue shares that represent fractional, undivided beneficial interests in the trust’s net assets, consisting mainly of ethereum held by the Coinbase Custody Trust Company. The filing indicates that the ETF is intended to offer investment exposure to the price of ethereum through the securities market, avoiding the operational challenges of investing directly in cryptocurrency assets.
The net asset value (NAV) of the trust, to be calculated at the close of the market each business day, will depend on the CF Benchmarks Index, which compiles ETH trading data from several leading cryptocurrency exchanges.
The Ethereum Trust’s shares will be continuously issued and redeemed in “baskets,” which are large blocks of shares traded for ethereum. Only authorized broker-dealers are allowed to purchase or redeem these baskets, which could help reduce the volatility of premiums and discounts commonly associated with over-the-counter (OTC) ethereum funds.
Following the news of the ETF on platforms such as X, ethereum saw a price surge of over 13% against the U.S. dollar. The price surged from $1,885 to a peak of $2,135 per ethereum around 7:00 p.m. Eastern Time on November 9, 2023. Blackrock’s filing follows similar applications for spot ethereum ETFs by Ark Invest, 21shares, and Vaneck with the SEC.
The ETF proposal from Blackrock arrives against the backdrop of the SEC’s recent approval of ethereum-based futures ETFs and ongoing discussions about the regulation of spot bitcoin exchange-traded products (ETPs). The filing emphasizes Blackrock’s ETF strategy to mitigate the risk of losses due to fraud or insolvency that investors may encounter when holding digital assets on centralized exchanges.
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