BlackRock Files For Spot ETH ETF

The world's largest asset manager has filed for a spot ETH ETF, following its move to launch a bitcoin spot ETF.

The move may suggest that the BTC ETF is a done deal.

Update 11/16/2023: It has now been confirmed that BlackRock has applied to launch a spot ETH ETF. The application was filed with the SEC on November 15.

Yesterday, ETH decisively broke its recent downtrend against BTC and pushed significantly higher, first breaking $2,000 and ultimately touching $2,100 before retracing.

The cause: BlackRock.

The BlackRock Effect

BlackRock's plan to launch an ETH spot ETF was revealed in a NASDAQ filing. Like a spot BTC ETF, this fund would actually hold coins, custodying them with a secure provider, rather than relying on futures contracts, as all major existing crypto ETF products do. This means any demand for the ETF, which will be available to retail and institutional investors through their regular trading platforms, will be passed through to the underlying market—with a potentially significant impact on price.

It's this price bump, caused by perhaps billions of dollars flowing into the asset, that bitcoin buyers have been front-running in recent weeks. Now, the same dynamic applies for ETH. This has been compounded by a lengthy period of time when BTC has been in the spotlight, and ETH has lost value in BTC terms. Now that something fundamental has changed, traders are looking at it with fresh interest, and thinking it's undervalued.

ETH daily chart, TradingView
ETH saw a $200 price bump yesterday.

For BlackRock, the move into an ETH ETF is an obvious and logical one. There are already BTC futures ETFs, and ETH futures ETFs. The assumption (being priced into the markets with greater confidence every day) is that there will soon be a spot BTC ETF. The recent Grayscale case has established, with legal effect, that the SEC has little reason to deny a spot BTC ETF when there is already an equivalent futures product.

Therefore there is no reason an ETH spot ETF should not also be approved, and BlackRock knows there will be demand for one. The fact that the investment giant has taken the trouble to file an application for an ETH product has given traders further confidence in BTC, too.

Ark Announces New Products

With renewed interest in crypto ETFs, it will likely only be a matter of time before there are further applications for futures and spot ETFs for major altcoins.

Yesterday, Cathie Wood’s investment management firm, Ark Invest, teamed up with 21Shares to launch several new crypto futures ETFs. Five new products will start trading on the CBOE next week:

  • ARK 21Shares Active Bitcoin Futures Strategy ETF (ARKA)
  • ARK 21Shares Active Ethereum Futures Strategy ETF (ARKZ)
  • ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC)
  • ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY).
  • ARK 21Shares Blockchain and Digital Economy Innovation ETF (ARKD)

At the time of writing, ETH is trading at $2,086.

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