- BlackRock is now in the home stretch.
- The trillion-dollar asset manager filed its revised S-1 registration statement.
- The filing features several important revisions.
Earlier this month, the odds of spot ETH ETF proposals getting the greenlight appeared dim. The market had already started to brace for disappointment, with experts shelving their bets due to the SEC’s deafening silence.
Then, in a twist no one saw coming, the SEC stunned everyone by giving ETH ETFs the nod, breathing life back into the market, and prompting heavyweights like BlackRock and 21Shares to jump back into the game as they now eye the possibility of kicking off trading as soon as next month.
BlackRock Inches from Trading ETH ETFs
On May 29, BlackRock filed an amended registration statement for its proposed Ethereum fund, building on the asset manager’s initial filing from November 2023.
Sponsored
BlackRock’s updated S-1 registration statement comes nearly a week after the SEC approved eight 19b-4 forms.
The new S-1 filing fills several placeholder fields, including details about seed funding. Here’s a quick rundown of what’s changed:
- BlackRock noted that it generated $10 million in proceeds via a seed capital purchase by BlackRock Financial Management of 400,000 shares at $25 per share.
- The asset manager detailed that its sponsor, iShares Delaware Trust Sponsor, may collect up to $500,000 in annual fees, moving away from its initial percentage-based sponsor fee.
- According to the filing, the trust will issue and redeem shares online in blocks of 40,000 and trade under the ticker “ETHA.”
- BlackRock named Wilmington Trust, National Association its Delaware trustee, and Bank of New York Mellon its trust administrator and cash custodian.
- The new S-1 reintroduces the option for in-kind creation and redemptions, allowing crypto rather than cash transactions among authorized participants.
- Finally, the filing explicitly notes that BlackRock will not engage in ETH staking, aligning with Nasdaq’s May 22 amendment on behalf of BlackRock.
The S-1 filing is the final step before issuers can start trading, but BlackRock still has some blanks to fill in, such as fee details. The asset manager is likely using this filing to provoke guiding comments from the SEC and gauge what other issuers are planning for their fees to secure a competitive edge.
Sponsored
Previously, BlackRock and other issuers engaged in a fee war with Bitcoin ETFs, constantly revising their rates. At press time, BlackRock and Fidelity offer the lowest fees at 0.25% and 0.20%, respectively, a strategy that has helped them dominate the Bitcoin ETF scene based on inflows.
Still, with these revisions, BlackRock is now in the home stretch, poised to launch trading soon officially.
A Major Win For ETH ETFs
“Good sign, [probably] see the rest roll in soon,” Bloomberg ETF analyst Eric Balchunas said in a social media post, expressing optimism that trading could start as early as late June. This is a complete shift from his 25% odds of an ETH ETF approval earlier this month.
Balchunas noted that the SEC could still send issuers through another round of fine-tuning. Nevertheless, the ETF expert is optimistic, suggesting that July 4 is the date to watch.
Balchunas’ colleague, James Seyffart, praised BlackRock’s updated S-1 as “almost certainly the engagement we were looking for,” indicating that “issuers and SEC are working towards spot Ethereum ETF launches.” This update marks a significant milestone for issuers, especially considering the SEC had remained tight-lipped for almost six months.
On the Flipside
- Cathie Wood claims the SEC’s unexpected approval of ETH ETF proposals is likely because of electoral pressure.
- James Seyffart estimates Ethereum ETFs might capture 20-25% of the investment compared to Bitcoin ETFs. On the other hand, Eric Balchunas takes a more conservative approach, expecting a 15-20% range.
Why This Matters
BlackRock’s revised S-1 statement suggests that ETH ETFs are inches from trading and changing the course of the market by potentially opening the doors for other altcoin ETFs.
Crypto is becoming increasingly relevant for American voters:
Crypto Could Decide 2024 Elections: Here’s Why
Trump pledges to end Biden’s anti-crypto crusade:
Trump Vows to Free Silk Road Founder and End Biden’s Crusade
