The Blubber

BlackRock files for spot ethereum ETF.

BlackRock, the prominent asset management giant, has formally submitted an application for an Ethereum exchange-traded fund (ETF), showcasing its continued commitment to cryptocurrency investments in line with growing investor confidence in the approval of such financial instruments.

The iShares Ethereum Trust, recently registered and awaiting approval to be listed on Nasdaq, is designed to provide investors with exposure to ether, the second most widely used cryptocurrency, without direct ownership.

BlackRock's proposal seeks to transform the trust into a "spot" ETF, signifying ownership of ether rather than futures products linked to the cryptocurrency. Unlike futures-based crypto ETFs, which the U.S. Securities and Exchange Commission (SEC) has approved previously, the spot crypto market has faced skepticism from regulators due to concerns about fraud and manipulation.

In a significant development in August, a federal appeals court ruled against the SEC's rejection of Grayscale Investments' application for a spot bitcoin ETF, marking a breakthrough for the industry. This victory has spurred heightened interest from various companies filing for similar investment vehicles in recent months, contributing to the restoration of confidence in the crypto sector following notable collapses last year.

BlackRock's initial foray into the crypto space involved filing for a spot bitcoin ETF in June. The latest filing signals the company's strategic expansion beyond bitcoin, the world's most widely recognized cryptocurrency.

The competition for market share in the ETF space will pit BlackRock against crypto-native firms like Grayscale and Valkyrie, as well as traditional finance giants such as Invesco. Coinbase Custody, a division of crypto exchange Coinbase, is slated to safeguard the proposed ETF's ether holdings, also serving as the proposed custodian for BlackRock's bitcoin ETF.