BlackRock's Latest ETH ETF Proposal: Key Updates

Earlier this month, the likelihood of spot ETH ETF approvals seemed bleak. Market experts had tempered their expectations, awaiting the SEC’s decision in silence.

Unexpectedly, the SEC granted approval for ETH ETFs, reviving market interest. Major players like BlackRock and 21Shares are now preparing to commence trading, potentially as early as next month.

BlackRock Advances Ethereum Fund with Updated Registration and $10 Million Seed Funding

On May 29, BlackRock submitted an updated registration for its proposed Ethereum fund, enhancing its initial November 2023 filing. This revised S-1 registration follows the SEC’s approval of several 19b-4 forms.

The new filing includes specifics on seed funding. BlackRock has generated $10 million through a seed capital purchase of 400,000 shares at $25 each.

BlackRock’s Ethereum ETF Details: Fee Structure and In-Kind Transactions

BlackRock's sponsor, iShares Delaware Trust Sponsor, may now collect up to $500,000 in annual fees, diverging from the previous percentage-based fee structure.

The trust will issue and redeem shares in blocks of 40,000, trading under the ticker “ETHA.” Wilmington Trust, National Association, will serve as Delaware trustee, with Bank of New York Mellon as trust administrator and cash custodian.

A notable reintroduction in the S-1 is the option for in-kind creation and redemption, allowing transactions in crypto rather than cash among authorised participants.

BlackRock has clarified that it will not engage in ETH staking, aligning with Nasdaq’s recent amendment on their behalf.

BlackRock's Final Preparations for Ethereum ETF Highlight Fee Strategy

This filing is the final procedural step before trading can begin. BlackRock still needs to finalise certain details, such as fee structures. This move appears to be a strategy to elicit feedback from the SEC and other issuers, aiming to refine fee competitiveness.

Previously, BlackRock and other issuers frequently adjusted fees for Bitcoin ETFs. Currently, BlackRock and Fidelity lead with the lowest fees at 0.25% and 0.20%, respectively.

Analysts Optimistic About Imminent Launch of Spot Ethereum ETFs

Bloomberg ETF analyst Eric Balchunas has expressed optimism, suggesting trading might start by late June. This is a stark change from his earlier 25% probability estimate for ETH ETF approval.

Balchunas cautions that the SEC may request further refinements but remains positive, eyeing July 4 as a potential starting date.

James Seyffart, another analyst, praised the updated S-1, viewing it as a clear sign of progress. He noted that this could lead to the imminent launch of spot Ethereum ETFs, marking a significant milestone given the SEC’s previous prolonged silence.

BlackRock’s updated proposal for its ETH ETF shows substantial progress, with potential for trading to begin soon. Analysts are optimistic, although further SEC adjustments may be required.