BlackRock taps Coinbase custodian for its Ethereum ETF
BlackRock, the world’s largest asset manager, has officially filed a filing with the Securities and Exchange Commission (SEC) for a spot exchange-traded fund (ETF) based on Ethereum.
The proposed ETF, named “iShares Ethereum Trust,” aims to provide investors with exposure to Ethereum’s price movements through traditional stock exchange channels.
The filing, made with the Nasdaq stock exchange, outlines BlackRock’s intention to create an ETF that reflects the performance of the price of ether (ETH), the native token of the Ethereum blockchain. The ETF would hold ether as its underlying asset, and Coinbase Global is designated as the custodian for the fund’s ether holdings.
This move follows BlackRock’s registration of the iShares Ethereum Trust entity with the Delaware Department of State Division of Corporations a week ago. The recent filing with the SEC provides more details about the proposed ETF, including the selection of Coinbase Custody Trust Company as the custodian and the CME CF Bitcoin Reference Rate as the benchmark.
The iShares Ethereum Trust filing comes in the wake of BlackRock’s previous filing for the iShares Bitcoin Trust in June of this year. The SEC is currently reviewing multiple spot bitcoin ETF applications, and BlackRock’s bitcoin ETF filing, known by the ticker IBTC, is awaiting approval.
The announcement had a muted impact on the price of ether, which experienced a modest increase of nearly 2% to around $2,080 following the news. BlackRock’s interest in offering both bitcoin and ethereum ETFs reflects the growing demand for cryptocurrency investment products from institutional investors.
If approved, the iShares Ethereum Trust ETF would provide retail investors with a regulated way to gain exposure to Ethereum’s price without directly holding the cryptocurrency. While the filing provides detailed information about the ETF’s structure, the regulatory agency’s decision is awaited amid previous rejections of spot Bitcoin ETF proposals.
Earlier in October, Grayscale Investments, in partnership with NYSE Arca, also submitted its own application to the SEC seeking approval to transform the Grayscale Ethereum Trust (ETHE) into a spot Ethereum exchange-traded fund (ETF).
The Grayscale Ethereum Trust currently stands as the world’s largest ether investment product, managing almost $5 billion in assets. When launching a new crypto ETF, regulatory authorization is typically sought from the exchange that lists the ETF’s shares, rather than the sponsor itself.