ETHBTC Ratio Soars as BlackRock CEO Larry Fink Backs Ethereum ETF
The recent approval of a spot Bitcoin ETF by the SEC has already caused a rise in the price of Ethereum (ETH), leading experts to predict a similar approval for an Ethereum ETF. However, the SEC’s perspective on Bitcoin as a “non-security commodity” played a crucial role in approving Bitcoin ETFs, and this may not be the case for Ethereum. Nevertheless, the support from BlackRock’s CEO, Larry Fink, for an Ethereum ETF could potentially change the SEC’s view on whether Ethereum is a security or a commodity, based on market sentiment.
Larry Fink, the CEO of BlackRock (BLK), expressed his support for an Ethereum ETF in an interview with CNBC, just one day after the launch of the highly anticipated Bitcoin ETF. Fink stated, “I see value in having an Ethereum ETF. These are just stepping stones towards tokenization, and I truly believe this is the direction we are heading.” Tokenization refers to the process of representing assets, whether physical or digital, as tokens on a blockchain. Fink believes that tokenization has the potential to address issues such as money laundering and corruption.
The $9 trillion asset management firm, BlackRock, seems to be considering the possibility of listing a similar product for Ethereum’s native token, aligning with its progressive approach towards tokenization. Fink also emphasized that he sees cryptocurrency not as a currency, but as an asset class. He specifically mentioned Bitcoin, describing it as “an asset class that offers protection” against geopolitical risks. He further stated, “It is no different from what gold represented for thousands of years. Unlike gold, we are almost reaching the limit of the amount of Bitcoin that can be created.”
After receiving support from BlackRock, the ETHBTC ratio surged towards its October high and is currently trading at 0.06039.
As for the SEC’s potential view on an Ethereum ETF, the decision has been postponed, and it will take over 45 days for the SEC to review a proposal for a rule change that would allow Grayscale to convert its Ethereum trust into a spot Ethereum ETF. The new deadline for the decision is now set for January 25, 2024. Additionally, the SEC has also delayed its decision on the Ethereum ETF proposed by Hashdex, a crypto asset management firm, as stated in a separate document.
There is an ongoing debate regarding whether Ethereum should be classified as a security or a commodity for the purpose of ETF approval. The SEC’s previous approval of Ethereum futures ETFs in October indicated an implicit recognition of ether as a commodity, according to a Bloomberg analyst. The approval of ether futures ETFs in October 2023 and the recent launch of a spot Bitcoin ETF suggest that we can anticipate more applications for spot Ethereum ETFs, possibly as early as later this year. However, if the SEC were to classify ether as a security, it is likely that legal challenges would arise regarding this designation.
Tags: Cryptocurrency, Ethereum