The price of Ether went up 10% in a day after BlackRock registered its iShares Ethereum Trust on Thursday morning. Nasdaq confirmed the firm's intentions by filing a 19b-4 form hours later, leading the price of the second-largest cryptocurrency to skyrocket, surpassing the $2,000 threshold for the first time in 12 months.
BlackRock follows the lead of companies such as Grayscale, Ark Invest, Invesco U.S., Hashdex, and VanEck, who have already submitted spot ETH exchange-traded funds (ETF) for the Securities and Exchange Commission's (SEC) approval.
BlackRock gets deeper into crypto
For the last couple of months, the largest asset-managing firm in the world has been getting increasingly involved in the cryptocurrency market.
The latest move towards ether ETFs comes two weeks after the New York-based investment firm listed its iShares Bitcoin Trust (IBT) on the Depository Trust and Clearing Corporation - one of the last steps in the bureaucratic ladder towards the spot bitcoin ETF entering the market.
Concurrently, the recent actions of the SEC might hint at a more favorable policy shift towards crypto-based financial products.
One month ago, the SEC forgo its right to appeal against a court ruling that stated that the agency had discriminated against Grayscale's spot Bitcoin ETF. As the legal verdict asserted that the investor protection mechanisms for crypto future exchanged trade funds are equally valid for spot contracts, the SEC no longer has plausible reservations against them.
In the 19b-4 filing, Nasdaq mentions the favorable decision by the U.S judges, stating, "given that the Commission has approved ETFs that offer exposure to ETH futures, which themselves are priced based on the underlying spot ETH market, the Sponsor believes that the Commission must also approve ETPs that offer exposure to spot ETH."
A bull is born
In late September, the SEC approved nine Ethereum-related futures ETFs to enter the U.S. financial market. Although hotly anticipated, the initial performance of the contracts was somewhat disappointing.
Irrespective of the behavior of the ETH futures ETFs, bullish sentiment has been taking over the cryptocurrency markets in the past month. Excitement began to mount after the failure of the SEC to appeal the Grayscale Investments case, which has led to the price of both bitcoin and ether rising over 30%.
The likelihood of an imminent approval of spot contracts has given confidence to market players, as it signals that the risk of cryptocurrencies has decreased to a level which is acceptable to traditional investors. Furthermore, crypto-related exchange-traded funds expand the demand for digital assets and increase the value of current portfolios.
During the latest crypto downturn, the market has undergone profound changes in regulation, technological development and value creation. While nobody can say for sure that the winter is over, signs of a crypto spring are blossoming everywhere.