SEC Delays Decision on BlackRock’s Ethereum ETF Again

The Securities and Exchange Commission (SEC) has postponed its decision on the proposed spot Ethereum exchange-traded fund (ETF) from BlackRock, the world’s largest asset manager, for the second time. The new deadline is now June 10, 2024, according to a filing published on Monday.

BlackRock filed its application for the iShares Ethereum Trust in November 2023, seeking to offer investors exposure to the second-largest cryptocurrency by market capitalization. The SEC initially delayed its decision in January 2024, citing the need for more time to evaluate the proposal.

BlackRock is not the only firm waiting for the SEC’s approval of a spot Ethereum ETF. Several other applications, including from Fidelity, Invesco, and Galaxy Digital, have also been delayed by the regulator. Bloomberg ETF analyst James Seyffart predicted that the SEC would not make a final decision until May 23, 2024, which is the statutory deadline for the applications from VanEck and Ark Invest, the first ones to be filed in September 2023.

The SEC has been reluctant to approve any spot cryptocurrency ETFs, citing concerns over market manipulation, investor protection, and regulatory oversight. However, the regulator has allowed ETFs based on cryptocurrency futures contracts, which are traded on regulated exchanges. The first such product, the ProShares Bitcoin Strategy ETF, launched in October 2023 and was followed by several others, including two Ethereum futures ETFs from VanEck and ProShares.

The demand for cryptocurrency ETFs has been growing as more investors seek exposure to the emerging asset class without having to deal with the technical and security challenges of buying and storing digital tokens directly. Cryptocurrency ETFs also offer lower fees and tax advantages compared to other investment vehicles.

The delay of the spot Ethereum ETF decision comes as the Ethereum network prepares for a major upgrade, dubbed Dencun, which is expected to improve its scalability, security, and efficiency. The upgrade, which will transition Ethereum from a proof-of-work to a proof-of-stake consensus mechanism, is also seen as a positive factor for the cryptocurrency’s price, which has surged more than 300% in the past year.

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