Ethereum

April

Spot

BlackRock

On August 6, Nasdaq and BlackRock&nbsp;<a style="text-decoration:none" href="https://www.reuters.com/markets/us/blackrock-nasdaq-seek-rule-change-list-options-spot-ethereum-etfs-2024-08-06/" rel="noopener noreferrer nofollow">submitted</a> a proposal to the US Securities and Exchange Commission (SEC) to list and trade options for BlackRock's spot Ethereum Exchange-Traded Fund (ETF).&nbsp;
The proposal, filed through the Nasdaq International Securities Exchange, represents a significant step in expanding crypto investment options within traditional financial markets.
<h2 dir="ltr" id="span-span-spot-ethereum-etf-structure-span-span">Spot Ethereum ETF Structure</h2>
According to the filing, BlackRock's proposed iShares Ethereum Trust will be exclusively backed by Ethereum (ETH), which Coinbase will custody. The Bank of New York Mellon will manage the cash assets. Notably, the trust will avoid engaging in Ethereum staking to generate additional income.&nbsp;
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The primary aim of this proposal is to enhance the range of investment tools available for Ethereum, making it more accessible to traditional investors. While these shares do not provide direct ownership of ETH, they offer exposure to Ethereum through public securities markets.
<blockquote>
 "The exchange believes that offering options on the Trust will benefit investors by providing them with an additional, relatively lower cost investing tool to gain exposure to spot ether," the&nbsp;<a style="text-decoration:none" href="https://www.sec.gov/files/rules/sro/ise/2024/34-100661.pdf" rel="noopener noreferrer nofollow">filing</a> said.
</blockquote>
Options provide traders the flexibility to buy or sell an asset, such as a stock or ETF, at a predetermined price before a set date. This tool is used to hedge against potential losses or speculate on future price movements.&nbsp;
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Unlike futures, options give traders the choice to execute or not execute the trade, offering greater flexibility.
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Nasdaq and BlackRock have a long track record in listing options for commodity ETFs structured as trusts. Their previous successes include the iShares COMEX Gold Trust and the iShares Silver Trust.&nbsp;
<h2 dir="ltr" id="span-span-regulatory-approval-timeline-span-span">Regulatory Approval Timeline</h2>
Bloomberg ETF analyst James Seyffart&nbsp;<a style="text-decoration:none" href="https://x.com/JSeyff/status/1820916415227908108" rel="noopener noreferrer nofollow">noted</a> that the SEC has a 21-day window to comment on the proposal. However, the final decision is expected around April 9, 2025.
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Beyond the SEC, approval is also required from the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC).
<h2 dir="ltr" id="span-span-etha-s-growing-market-presence-span-span">ETHA’s Growing Market Presence</h2>
Since the launch of spot Ethereum ETFs in the US on July 23, BlackRock’s Ethereum ETF, ETHA, has seen its market dominance rise. In terms of assets under management (AUM), ETHA's share of the market has increased from 3% to 9%, according to DefiLlama.&nbsp;
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Despite this growth, Grayscale's Ethereum Trust, now converted into an ETF (ETHE), maintains a significant lead with an AUM of $4.77 billion, nearly nine times larger than ETHA.

Nasdaq and BlackRock Propose Options for Spot Ethereum ETF: SEC Decision Expected by April 2025

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