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Blackrock Files to Launch Ethereum Trust ETF on Nasdaq
BlackRock, the world’s largest asset manager, is delving deeper into the realm of cryptocurrency with its latest move involving an Ethereum exchange-traded fund (ETF). The company has taken a significant step by registering its Ishares Ethereum Trust with the Division of Corporations in Delaware and subsequently submitting a 19b-4 registration to the U.S. securities regulator.
This strategic initiative aims to offer U.S. investors a regulated spot ETF for tracking the price of Ethereum (ETH). The Ishares Ethereum Trust is meticulously crafted to mirror the performance of Ethereum’s price, accounting for associated expenses and liabilities. The proposed ETF will issue shares representing fractional, undivided beneficial interests in the trust’s net assets, primarily consisting of Ethereum held by the Coinbase Custody Trust Company.
The noteworthy aspect of this ETF lies in its structure. The Ethereum Trust’s shares will be continually issued and redeemed in “baskets,” substantial blocks of shares traded for Ethereum. Importantly, only authorized broker-dealers have the privilege of purchasing or redeeming these baskets. This mechanism is designed to mitigate the volatility of premiums and discounts commonly associated with over-the-counter (OTC) Ethereum funds.
In response to this development, Ethereum experienced a notable surge, rallying over 13% against the U.S. dollar. The price climbed from $1,885 to a peak of $2,135 per Ethereum. Eastern Time on November 9, 2023. It’s worth noting that BlackRock’s ETF filing aligns with similar applications for spot Ethereum ETFs by other entities such as Ark Invest, 21shares, and Vaneck with the U.S. Securities and Exchange Commission (SEC).
This move from BlackRock comes at a time when the SEC recently approved Ethereum-based futures ETFs and ongoing discussions persist regarding the regulation of spot Bitcoin exchange-traded products (ETPs). The filing underscores BlackRock’s ETF strategy, emphasizing risk mitigation for investors against potential losses due to fraud or insolvency when holding digital assets on centralized exchanges.
Related: Bitcoin Aims for $50,000 Driven by Spot Bitcoin ETF Euphoria and the 2024 Halving Event
Ethereum has captured the attention of the crypto community as it successfully maintained its position above the $1,900 threshold, sparking anticipation for a potential rally. Recent data indicates that ETH has broken a crucial resistance level, setting the stage for potential upward momentum in the coming days.
Ethereum Surpasses Crucial Price Threshold
In the past week, Ethereum exhibited a promising performance, sustaining a price above $1,900 and registering a notable 4% surge. Over the last 24 hours, according to CoinMarketCap, ETH’s value has increased by over 2%, bringing its current trading price to $1,914.42 with a market capitalization exceeding $230 billion.
The breakthrough in Ethereum’s performance is underscored by its ability to overcome a previously challenging resistance level, as noted by Caleb Franzen, the founder of Cubic Analytics. Analyzing ETH’s daily chart, key indicators, such as the MACD signaling a bullish advantage and the Bollinger Bands indicating high volatility, contribute to the positive outlook.
Better news: $ETH is breaking through resistance. https://t.co/6zTeOTTxwC pic.twitter.com/CQljXcMb37
— Caleb Franzen (@CalebFranzen) November 9, 2023
Ethereum’s Relative Strength Index and Chaikin Money Flow have consistently remained at elevated levels in recent days, providing support for the token’s upward price movement.
The question arises: Is this the commencement of a new rally? Despite the heightened social volume surrounding Ethereum and a notable drop in weighted sentiment on November 8th, some metrics raise concerns. The exchange netflow data suggests a significant selling pressure on ETH, which could potentially halt the ongoing bullish momentum.
However, there are optimistic indicators as well. CryptoQuant reports that Ethereum’s active addresses and transferred volume remain high, pointing towards continued interest and engagement. Further relief is found in the derivatives market, where ETH’s funding rate is in the green, signifying that derivatives investors are buying the token at its higher price.
Additionally, Ethereum’s taker buy/sell ratio leans towards buying sentiment in the derivatives market, further supporting the notion that positive market dynamics may prevail.
