The regulator sought public comment on the risks involved in launching such products

SEC postpones the deadline for BlackRock and Fidelity’s applications to launch spot ETH ETFs

05.03.2024 - 09:15

110

3 min

What’s new? The US Securities and Exchange Commission (SEC) has re-postponed the decision deadline on applications by investment firms BlackRock and Fidelity to launch spot exchange-traded funds (ETFs) based on Ethereum. The regulator also asked the public whether such products should be approved and whether the Proof of Stake (PoS) consensus algorithm used by the Ethereum blockchain raises “unique concerns about ether’s susceptibility to fraud and manipulation.”

Material by The Block

What else is known? Since discussions opened on March 4, the public has 21 days to submit comments and 35 days to object. Both investment firms filed for spot ETH ETFs last November; in January, the deadline for Fidelity and BlackRock products was delayed to March 5 and March 10, respectively. Bloomberg named May 23 as the next key date.

Following BlackRock and Fidelity, Franklin Templeton, VanEck, Grayscale, ARK Invest and 21Shares applied to launch Ethereum funds. Analyst Alex Krüger stated that the Ethereum network will start to grow once the likelihood of ETF approval increases. However, he believes this will not happen as long as the SEC is headed by Gary Gensler, who has previously stated that all cryptocurrencies except bitcoin could be recognized as securities.

Meanwhile, on January 10 of this year, trading in shares of ten spot bitcoin ETFs opened following SEC approval. At that time, Gensler emphasized that the decision applies exclusively to BTC and does not speak about the regulator’s willingness to allow other similar crypto products to the market.

BlackRock and Fidelity are also issuers of spot BTC ETFs. Their IBIT and FBTC funds are leading in terms of inflows, as well as trading volumes and assets under management. On March 5, the daily trading volumes of IBIT and FBTC shares reached $2,4 billion and $1 billion, respectively. BlackRock accumulated $11 billion worth of bitcoins in assets under management, and Fidelity’s figure exceeded $6,5 billion.

Source: Twitter.com

In January, both products were among the top 10 funds in terms of fund flow.

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