BlackRock’s Ethereum ETF Just Got a Major Upgrade—Here’s Why It Matters

Wall Street’s quiet crypto invasion accelerates as BlackRock revises its Ethereum ETF filing to include in-kind redemptions—a move that could lure institutional capital while sidestepping the tax headaches of cash settlements.

Why this matters: In-kind redemptions mean big players can swap ETF shares directly for ETH (and vice versa) without triggering taxable events. The SEC’s usual foot-dragging on crypto just met its match: BlackRock’s army of lawyers.

The cynical take: After years of fighting crypto tooth-and-nail, traditional finance suddenly loves blockchain—as long as they can slap a 2% management fee on it.

BlackRock highlights quantum computing risks for IBIT

Meanwhile, BlackRock has also submitted an updated filing for its Bitcoin product IBIT. Seyffart pointed out that this update included an expanded language on the risks of quantum computing to Bitcoin network.

According to the firm, advances in this rapidly evolving sector could impact Bitcoin’s cryptographic security.

However, Seyffart has poured cold water on any fears, noting that these disclosures are boilerplate as issuers are expected to highlight all the potential risks with any product they list or the underlying assets they invest in.

He said:

“These are just basic risk disclosures. They are going to highlight any potential thing that can go wrong with any product they list or underlying asset that is being invested in. It’s completely standard. And honestly, it makes complete sense.”

Thus, he believes no one should assign malice or intent to these disclosures as they merely reflect a standard procedure.

More crypto ETF decisions await SEC response

In-kind redemption is only one of the many decisions the SEC must make on crypto ETFs.The regulator is also dealing with pending applications to allow staking for Ether ETFs.

Several ETH ETF issuers, including BlackRock, Fidelity, Grayscale, and VanEck, have already applied to allow staking, but the regulator is still contemplating whether to allow it. In April, it postponed a decision on the Grayscale request to June 1.

Many believe the SEC would eventually approve despite the delays, especially as other jurisdictions have done the same. The SEC has shown a willingness to allow amendments to the Crypto ETFs as the sector continues to mature by allowing options trading.

Meanwhile, the regulator also needs to decide whether it will allow spot ETFs for multiple altcoins and memecoins. There were over 72 crypto-related ETF applications before the SEC, including popular altcoins such as Solana, XRP, Litecoin, and Dogecoin.

With altcoins currently enjoying a resurgence in value and talks of altcoin season gaining momentum after a recent surge in value, the approval of the ETF application could be the perfect catalyst for the long-awaited altcoin season.

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