Bittime - The United States Securities and Exchange Commission (SEC) is opening the opportunity for the public to provide comments on the latest revision of the Ethereum ETF proposal submitted by BlackRock. This step follows the submission of a revised proposal from Nasdaq on April 19 to meet the regulator's expectations.
BlackRock proposed an ETF called the iShares Ethereum Trust in November 2023. This ETF aims to track Ethereum price movements. The revision proposed by BlackRock is significant, because it changes the transaction model from direct Ethereum trading to cash transactions.
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Responding to these revisions, the SEC gave the public and market players 21 days to provide comments. These public comments are important because they will influence the regulator's review and lead to the SEC's final decision.
BlackRock Ethereum ETF Structure Changes
The iShares Ethereum Trust's initial proposal involved a process of creating and redeeming ETF units done by directly exchanging Ethereum. However, the latest revision explains that the process will now be carried out via cash transactions.
Also read: How Much Bitcoin Does BlackRock Own?
This model, called the cash redemption model, is similar to the model used for the spot Bitcoin ETF that the SEC approved in January.
The switch to a cash-based model is understood to be BlackRock's move to adapt to regulations. They focus more on financial transactions, rather than physical transactions of crypto assets.
BlackRock's steps are different from companies like Fidelity and Grayscale. Where they included a staking mechanism in their ETF proposal, BlackRock's revision actually removes the staking feature.
This decision may reflect BlackRock's cautious stance to streamline the approval process by following existing regulatory precedent.
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Market Response and Analyst Views
The future of crypto ETFs in the United States remains uncertain. Even though big players like BlackRock are resubmitting their proposals, market analysts are increasingly skeptical about an Ethereum ETF being approved in the near future.
Also read: BlackRock's BUIDL: Everything You Need to Know
Bloomberg ETF analyst Eric Balchunas even lowered his prediction for Ethereum ETF approval in May from around 70% to 25%. Meanwhile, Standard Chartered reversed their bullish outlook and now rate it unlikely that the SEC will approve an Ethereum ETF in May.
This shift in view is based on the absence of constructive communication between the SEC and ETF applicants. In fact, this is an indicator of prior approval for a Bitcoin ETF.
The delay in SEC decisions on other ETF proposals, such as those from Franklin Templeton and Grayscale, shows the regulator's caution in addressing crypto-based financial products.
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The opening of this public comment period provides an opportunity for the SEC to gather and study public input. It is these criticisms and suggestions that will ultimately determine the regulatory climate for Ethereum and other crypto ETFs.
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Also read:
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Bitcoin ETFs: BlackRock and Fidelity Still Lead the Market
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BlackRock Bets Big on RWA: A Token Worth Watching
DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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