The Great ETF Standoff
As the crypto world continues to watch and wait, BlackRock has stepped into the ring, arguing that the SEC is playing favorites in their game of ETF approvals. Spot crypto ETFs are getting snubbed, while futures ETFs are getting all the limelight. It’s like being at a party where only some guests are allowed to dance. BlackRock insists there’s no valid reason to treat these two types of ETFs differently.
BlackRock’s Bold Move
On November 9, BlackRock confirmed its plan for a spot-Ether (ETH) ETF—the “iShares Ethereum Trust.” This wasn’t just a casual announcement; it came with the official 19b-4 application filed by Nasdaq on behalf of the firm. It’s kind of like giving the SEC a friendly nudge, saying, “Hey, we see what you’re doing and we think it’s a bit odd.”
The SEC’s Double Standards
What’s the SEC’s excuse for denying spot crypto ETF applications? They claim that crypto futures ETFs are under the protective shield of the 1940 Act, while spot ETFs are left hanging under the 1933 Act, which they view as inferior. But hold onto your keyboards, folks! BlackRock argues that this distinction is about as useful as a chocolate teapot. The underlying assets, whether futures or spot, should not be treated differently based on the kind of regulations they fall under.
Fraud Detection and Market Integrity
The company points out that if the SEC approved futures ETFs via the CME, it—implicitly—acknowledged the ability of CME surveillance to detect potential issues in the spot market. So why not give the greenlight to spot ETFs? BlackRock is effectively telling the SEC, “You already have the tools and insights to protect investors, so let’s move forward with the spot stuff too!”
The Ripple Effect of Grayscale’s Victory
In this unfolding drama, Grayscale’s legal win over the SEC has thrown more fuel onto the ETF fire. The central argument? If ETH futures ETFs can be approved, then not approving a spot ETH ETF is like saying apples are okay, but oranges aren’t. Jack Chervinsky and Scott Johnsson, notable voices in the crypto space, find this line of reasoning compelling. As they see it, the SEC has its hands tied, and it’s running out of excuses.
What Lies Ahead?
So what’s in store for the future of crypto ETFs? Industry analysts are buzzing with predictions, with Bloomberg’s ETF analysts suggesting there’s a 90% chance of a spot Bitcoin ETF approval before January 10. It feels like we’re sitting on the edge of a big breakthrough in the markets. As we hold our breath for the SEC’s next move, one thing is clear: it’s a thrilling time to be involved in both crypto and ETF industries.
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