Blackrock (BLK) CEO Larry Fink may have generated momentum for a spot Ethereum exchange-traded fund (ETF). However, the approval for such a product will likely face a big regulatory hurdle.

"I see value in having an Ethereum ETF. As I said, these are just stepping stones towards tokenization," Fink said in an interview with CNBC Friday morning, just a day after the first spot bitcoin ETFs began trading in the U.S.

Why Fink's Comments Matter To An ETH ETF?

Blackrock originally changed how people thought about whether a spot bitcoin ETF would even be possible when the financial titan filed for their own offering in June 2023. They now have their own spot Ethereum ETF proposal as well. Many of the other same financial institutions, such as Ark, and Fidelity, that saw their spot bitcoin ETF products launch on Thursday, have also filed for spot Ether ETFs with the SEC.

VanEck is first in line for the potential approval of their spot Ethereum ETF product, with a final deadline for a decision from the SEC set for May 23rd.

ETH ETF May Face Regulatory Hurdles

While ether is often lumped in with bitcoin (BTCUSD) as the two major blue chip crypto projects, there are concerns that a spot ether ETF approval could be a more complex proposal. Much of the uncertainty around such a financial product has to do with the potential classification of ether (ETHUSD), which is the underlying crypto asset of the Ethereum system, as a security.

When asked whether the approval of a spot bitcoin ETF could open the door for other crypto asset ETF approvals, such as a spot Ethereum ETF, SEC Chair Gary Gensler stated, "I look at what we did this week as its cabined to one non-security, commodity called bitcoin."

That said, Brown Rudnick Partner Preston Byrne says there may not be many regulatory roadblocks to a spot Ethereum ETF approval. "So far, the only American regulator to assert that Ethereum is a security in an enforcement action is the NYAG's office," Byrne told Investopedia. "Ethereum's possible status as an unregistered security is a minority view, especially given the fact that the Ethereum Foundation's 2014 sale of Ether is now well past the statute of limitations. I would expect diligent lawyering to address the point in required statutory investor disclosures, but would not expect too much more regulatory interference beyond that."

Bloomberg ETF Analyst Eric Balchunas has pegged the odds of a spot Ethereum ETF approval by May at 70%.

Notably, futures-based Ether ETF products are already available for trade in the U.S. market. However, these offerings have not gained much traction and originally launched without much interest from traders.