The U.S. Securities and Exchange Commission (SEC) has once again delayed its decision on BlackRock, Inc.’s BLK application for a spot Ethereum exchange-traded fund (ETF). The first time the SEC delayed its decision on BLK’s spot Ether ETF application was this January, after approving the launch of spot Bitcoin ETFs.
With the current delay, the SEC has launched comment periods for the application in process.
The regulator wants to know whether the arguments that were made in favor of the recently approved spot Bitcoin ETFs (the launch of spot Bitcoin ETFs was approved on Jan 10, 2024) support Ether ETFs as well.
Also, the SEC wants feedback on whether spot Ether ETFs are prone to manipulation. It further wants to know whether spot and futures Ether exchange-traded products are similar.
Now, it is expected that the SEC will come up with a final decision on Ether ETF applications by May 23.
BLK filed for spot Ethereum ETF, named iShares Ethereum Trust, with the SEC in November 2023. Following this, price of Ethereum surged to its highest-level last year before pulling back afterward.
Notably, a spot crypto ETF tracks the market price of the underlying digital asset, giving investors exposure to the token without having to buy it.
In this case, the ETF would track the spot price of Ethereum, meaning that investors would invest in the price of Ethereum itself rather than in a company that is involved in the Ethereum ecosystem.
For years, the SEC warned of the risks of the largely unregulated crypto markets, turning various crypto-based investment applications away and levying fines on alleged crypto scams.
However, after the SEC allowed the trading of spot Bitcoin ETFs, there has been a shift in how cryptocurrencies are viewed and traded by investors.
Last month, Franklin Resources, Inc. BEN became the eighth firm within the crypto industry to file for a spot Ethereum ETF. Including BEN, all the firms that have been competing to introduce spot Ethereum ETFs rolled out spot Bitcoin products in January.
In June 2023, BLK became the first asset manager to file for a spot Bitcoin ETF, paving the way for a wave of filings by other asset managers like Fidelity, Invesco and WisdomTree.
Over the past six months, shares of BLK have gained 19.7% compared with the industry’s 24.9% growth.
Image Source: Zacks Investment Research
Currently, BlackRock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A better-ranked stock from the same space is Affiliated Managers Group, Inc. AMG. Currently, AMG carries a Zacks Rank #2 (Buy). Over the past 60 days, the Zacks Consensus Estimate for the company’s current-year earnings has been revised 5.7% upward. In the past six months, AMG shares have gained 22.4%.
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