Nasdaq Eyes SEC Approval For BlackRock Ethereum ETF Options
The crypto markets are buzzing with the news of BlackRock’s proposal to the SEC. On Tuesday, August 6, 2024, the American multinational investment company filed the petition involving options trading. It wants to list them on its Ethereum exchange-traded fund (ETF) and iShares Ethereum Trust (ETHA).
BlackRock submitted its proposal to the SEC via the Nasdaq International Securities Exchange. Founded in 1988, this company initially dealt with enterprise risk management. However, nowadays it’s the largest asset manager in the world. The latest reports show that the firm has been managing over $10 trillion in assets since the end of 2023.
Moreover, it’s dealing with cryptocurrencies, and while some believe that digital assets aren’t reliable, and crypto exchanges are too volatile for peace of mind, this market is still one of the largest worldwide. And now, BlackRock wants to use its experience with commodity ETFs to achieve similar success with digital currencies.
The company stated that if the SEC approves the project, it will start by introducing iShares Ethereum Trust assets, all of them consisting of Ethereum only. Coinbase will hold the latter. On the other hand, the Bank of New York Mellon will have the cash assets in its possession.
To avoid any complications and ensure security, the trust will refrain from engaging in ETH staking. Furthermore, Nasdaq announced that this project will enable it to create more investment tools for Ethereum. It also aims to make Ethereum blockchain technology and cryptos more accessible for investors preferring traditional markets.
That means Nasdaq might eventually sell cryptocurrencies on such markets, and this is a great success indeed. After all, many people see decentralized finance (DeFi) as the future, and this move might attract millions of customers to the crypto world.
How Will Nasdaq’s Proposal Work?
According to BlackRock, assets held by iShares Ethereum Trust won’t be the same as investing in ETH directly. The investors would be buying in the trust, instead of purchasing the specific ETH cryptos.
Nevertheless, this will give them some exposure to Ethereum. The company’s target is traditional investors, who prefer dealing with more familiar assets. Many avoid the crypto exchanges because of their unpredictability, but now they might have a chance to trade them in the public securities market.
Furthermore, the options market will enable people to buy or sell an asset for a specific price before a specific date. There are many kinds of assets available, like stocks, commodities, ETFs. Traders often prefer to purchase options as this way of investing safeguards them against potential losses.
Besides, options offer much more flexibility compared to futures. Market participants can decide themselves when to enter or exit the trades.
What Are The Chances Of BlackRock Achieving Success In This Endeavour?
Like Nasdaq, BlackRock has lots of experience in listing various options as trusts. Mostly, it has been working with commodities, though. For example, it constructed iShares COMEX Gold Trust and iShares Silver Trust. As a result, the company knows what it’s doing, and it can easily add options to the spot cryptocurrency ETF marks.
In addition, BlackRock is one of the major issuers of spot BTC and ETH ETFs in the United States. SoSo Value data shows that the company’s iShares Bitcoin Trust (IBIT)’s net assets hit $18.28 billion as of Monday, August 5, 2024. This figure makes the latter the largest spot BTC ETF around the world.
James Seyffart, an ETF analyst at Bloomberg Intelligence, discussed Nasdaq’s proposal about adding options on ETH ETFs. He expects the SEC to announce its final decision around Wednesday, April 9, 2025.
After all, the SEC isn’t the only agency that makes this decision. It has to discuss the subject with other institutions, like the Commodity Futures Trading Commission (CFTC) and the Options Clearing Corporation (OCC).
Meanwhile, BlackRock’s iShares Ethereum Trust (ETHA) is thriving. According to the latest report, its net assets reached $568.65 million. As a result, this fund is currently ranked as the third largest spot ETH ETF in the American market.
Despite global markets’ volatility, the spot Ethereum ETFs have enjoyed strong cash inflows. ETHA gained the most, thanks to Nasdaq’s filing. On Tuesday, August 6, it gained more than $108 million after announcing the news.
What Does An ETF Store President Think About These Developments?
Nate Geraci, ETF Store President, stated that the BlackRock Ethereum ETF might soon gain a place among the top ETF launches’ 10% in 2024. The company’s Bitcoin ETF IBIT has already achieved that feat. Moreover, the latter’s outflows have been declining steadily. That indicates that the fund is strong and it is developing well. Consequently, investors are waiting for good news about the Bitcoin ETF fund in the near future.
In the filing, Nasdaq and BlackRock stated that offering options on the trust will provide traders and investors with an additional tool for investing. It will benefit the market participants greatly by enabling them to invest with lower costs.
On Tuesday, the ETH price skyrocketed higher than $2,500. At the same time, the global market showed a strong recovery. It has been trading in bearish territory for the last few days due to fears of a US recession. But Nasdaq managed to banish these fears for now with its revolutionary step.
What Will The SEC Decide?
The speculation is rife on this subject, with both analysts and investors taking sides. However, rumours have it that the US Securities and Exchange Commission might have agreed on this proposal. Of course, it’s just a preliminary approval, but if the agency’s sentiment is positive, this will make way for Nasdaq so much easier.
Some traders are already purchasing the ETFs in anticipation. According to the report, the SEC approved three applicants, BlackRock, VanEck, and Franklin Templeton. However, others are also trying to gain permission for their projects.
Furthermore, some analysts expect eight spot Ether ETFs to launch at the same time. According to some news, the SEC has given final orders to asset managers, who are almost ready to launch Ether ETFs.
ETF analyst Eric Balchunas noted that the agency gave issuers time until Tuesday, July 16, 2024, to submit their final S-1 filings. All applicants must attach the amount of fee to their spot Ether ETFs when they submit their revised proposals.
If the SEC approves Nasdaq and BlackRock’s filing, it could change the crypto world, making the trading of digital currencies so much easier for traditional investors. After all, this market is vast and powerful, with substantial market capitalization. But it has the potential to achieve much more and this project would definitely aid with that goal.
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