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ETH Breaks Above US$ 2,000 Amidst BlackRock ETF Speculations
- ETH crossed US$ 2,000, a peak since April, with a 31% monthly increase bolstered by a 14% surge in recent days.
- BlackRock’s registration of an iShares Ethereum Trust suggests it may launch an Ethereum ETF, reflecting a trend among financial institutions despite SEC reservations.
- Grayscale aims to convert its large Ethereum Trust into an ETF for closer market alignment and regulatory compliance.
Ethereum (ETH) surpassed the US$ 2,000 (A$ 3,140) mark, heights not seen since April this year. ETH is now up 31% month-on-month with much of these gains coming from the last few days, when ETH soared by 14% in just a couple of days.
BlackRock Eyes Ethereum ETF Launch
The increase comes after BlackRock, the world’s largest asset manager, has taken further steps into the crypto market by registering an iShares Ethereum Trust in Delaware. The registration, completed by BlackRock Advisors and represented by Daniel Schwieger, could signal BlackRock’s interest in launching an Ethereum-based exchange-traded fund (ETF).
This move aligns with the actions of other ETF providers who have been eyeing spot Bitcoin ETFs, amidst a regulatory environment where the U.S. Securities and Exchange Commission (SEC) has only approved ETFs linked to futures contracts. The SEC’s hesitance, guided by concerns of fraud and manipulation in the spot Bitcoin market, has not stopped providers like Ark Investment Management, Invesco, and VanEck from also pursuing spot Ethereum ETFs. BlackRock’s registration points to a growing interest from major financial institutions in cryptocurrency investment products.
Grayscale Conversion, Lacklustre Receptions
Another important fund manager, Grayscale, announced in early October that it is working to transform its Ethereum Trust (ETHE) into a spot exchange-traded fund (ETF). ETHE, currently the largest Ether fund on the stock market, with over US$ 5 billion (AU$ 7.86 billion) in ETH, trades at a significant discount due to its trust structure. The conversion to an ETF is expected to offer a more precise reflection of Ethereum’s market movements by allowing direct redemptions, which the trust structure currently prohibits.
The initiative to transition ETHE into an ETF is seen as a strategic move to align the fund with U.S. regulatory frameworks. This comes at a time when the market has responded tepidly to new Ether-based futures ETFs, with low trading volumes in comparison to Bitcoin-based ETFs, indicating a lukewarm reception among investors. Despite this, the general sentiment is not negative, and the industry looks toward regulatory developments and market acceptance of these new investment products.
Analyst Eric Balchunas agrees with this sentiment, saying that it is early days yet and it will take time for volume to pick up.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
