SEC Pushes Back on BlackRock Ethereum ETF Approval Amid Falling Market Interest

• The SEC has postponed its decision on BlackRock’s Ethereum ETF options until November 10, 2024.
• This move comes after the SEC approved Blackrock’s Bitcoin ETF options on September 20.

The U.S. SEC has once again delayed its decision regarding the approval of Blackrock spot Ethereum ETF. This development has caused a domino effect, forcing Nasdaq ISE, LLC to delay listing and trading the iShares Ethereum Trust, managed by Blackrock, until the scheduled date. As we  reported earlier , this move comes after the SEC approved Blackrock’s Bitcoin ETF options. 

The SEC was initially supposed to  announce its decision on the Ethereum ETF options by September 26. Given that Nasdaq filed for a rule change to list the iShares Ethereum Trust ETF on July 22, the SEC’s standard 45-day review period was to end on that date.  

However, in a filing submitted by the regulatory body, the decision has been postponed to November 10, 2024. Still, the decision date for Bitwise’s ETHW was also postponed to November 11th because the proposed rule change was submitted one day after BlackRock’s.

Notably, the delay provides the SEC with additional time to thoroughly assess the rule change proposed by Nasdaq ISE.

The SEC has chosen to take a rather cautious path considering the impact of such a decision. According to the SEC filing, the delay is intended to give the agency more time to review the implications of allowing options on BlackRock’s Ethereum ETF. Nasdaq ISE LLC had submitted the proposal to amend its listing rules, which would enable it to include options on the iShares Ethereum Trust.

In another development, the SEC has also postponed a ruling on NYSE American LLC’s separate proposal to list and trade options on the Bitwise Ethereum ETF, the Grayscale Ethereum Trust, and the Grayscale Ethereum Mini Trust. 

The delay in the decision regarding the BlackRock Ethereum ETF options comes on the heels of the SEC’s approval of options for BlackRock’s Bitcoin ETF on September 20, 2024. The green light for BlackRock’s Bitcoin ETF options, trading under the symbol IBIT,

BlackRock’s push for this approval began as early as March, following a series of approvals for Bitcoin-linked ETFs in the U.S. However, the SEC’s decision was not without its challenges. The proposal faced significant scrutiny over concerns related to market manipulation and excessive risk-taking, which have been ongoing concerns for crypto derivatives.

Ethereum ETFs Struggle Amid Delays

While the SEC continues to deliberate on the BlackRock Ethereum ETF options, Ethereum-based exchange-traded funds have seen a decline in interest. The spot Ethereum ETF market has been facing outflows, with a one-day withdrawal of $79 million being the largest since its inception in July 2024. Notably, Grayscale’s ETHE fund experienced over $80 million in outflows, highlighting the dwindling demand for Ethereum-based investment vehicles.