Ether Jumps On ETF Hope | Bitcoin Mining Profit Surges

The second-largest cryptocurrency topped $2,000 for the first time since April.

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Nina Bambysheva Senior Reporter, Forbes Money & Markets
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Steven Ehrlich Director, Forbes Digital Assets
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BLACKROCK FILES FOR ETHER ETF

Ether surged 12% after Nasdaq filed paperwork that revealed that BlackRock plans to launch an exchange-traded fund based on the spot price of the token adding to pressure for the U.S. to permit such investments and echoing industry efforts to offer similar ETFs based on bitcoin.

Ether reached $2,103 Friday afternoon, up from $1,880 before the announcement. The currency has been below $2,000 since April.

Improving approval prospects for spot ETFs are lifting prices for ether and bitcoin as investors bet that the investor-friendly format will increase interest in owning the cryptocurrencies.

Smaller firms have filed for spot ether ETFs in recent months, but the application for a fund from BlackRock, the world’s largest asset manager, increases the urgency for the Securities and Exchange Commission to permit spot-market cryptocurrency ETFs.

The agency has turned down applications for such funds for years, insisting that the spot cryptocurrency markets are too prone to manipulation, but it allows similar ETFs that invest in futures on the tokens. That seems illogical, since the spot prices influence the futures, and an August ruling by a federal appeals court in a case involving bitcoin found the agency’s policy to be “arbitrary and capricious,” making approval of the ETFs more a question of when than if.

BlackRock’s iShares Ethereum Trust would hold the second-largest cryptocurrency as the underlying asset and track its price. Crypto exchange Coinbase would serve as the custodian for the fund's holdings, according to the filing. The SEC has sued Coinbase, claiming it is not authorized to run an exchange and that at least some of the cryptocurrencies it lists are unregistered securities.

The agency has up to 240 days to decide whether or not to approve the ether ETF product, which could push a potential start date all the way back until next fall.

BITCOIN REACHES AN 18-MONTH HIGH

The original cryptocurrency has also crossed a milestone of $37,000 for the first time since last May on growing optimism for approval of its own spot ETFs. The SEC has opened talks with Grayscale Investments about the details of the company's application to convert its Grayscale Bitcoin Trust into an ETF, according to CoinDesk.

CURRENT PRICE OF TOP 5 COINS (7-Day % Change)

Coin

Price

Percent Change

Bitcoin (BTC)

$37,251

7.1%

Ether (ETH)

$2,090

15.5%

Tether (USDT)

$1.00

0%

Binance Coin (BNB)

$251

9.5%

XRP (XRP)

$0.66

8.2%

Source: CoinGecko. Prices as of 3:51 p.m. on November 10, 2023.

How Binance Turned Its Failed Token ICO Into A Billion Dollar Windfall

Webinar: November 13 at 2:00 P.M. EST

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BITCOIN MINING PROFITABILITY SURGES

Daily revenue from mining bitcoin is surging, up more than 50% from the start of the year. Miners can now expect to earn $93 a day of revenue for each petahash of equipment they own, up from $60 at the end of 2022. A petahash is roughly equivalent to 10 bitcoin mining computers, so put another way, a typical bitcoin mining rig is now earning roughly $9.30 a day.

While the increase can be partially attributed to the price rally, it has more to do with a substantial rise in bitcoin transaction fees–miners earn revenue from newly minted bitcoin in the blocks they create and from transaction fees that network users pay to move funds.

The Valkyrie Bitcoin Miners ETF, which owns shares of publicly traded companies in the sector, was trading at $9.58 late Friday, up 49% on the year, as the industry recovers from the crisis conditions of 2022.

Also: How Investors Should Approach Bitcoin Miners As The Halving Approaches

KRAKEN TO RELEASE ACCOUNT DATA FOR CERTAIN CLIENTS TO IRS

Cryptocurrency exchange Kraken has notified clients that the company will turn over user information to the IRS. The announcement follows a lengthy legal battle that began in 2021 when Kraken received a John Doe summons from the IRS.

Kraken will release data including names, taxpayer identification numbers, addresses and transaction history for users with any combination of accounts that exceeded $20,000 in value of transactions in any year for the period January 1, 2016, through December 31, 2020. The $20,000 threshold for covered accounts is determined by the sum of deposits, withdrawals and trades. This means that even if you did not make any trades, if your deposits and withdrawals totaled more than $20,000, your information will be shared.

ELSEWHERE

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The Block