- BlackRock, a leading asset management company, has applied to the SEC to launch a spot Bitcoin ETF, potentially providing investors with an easy way to gain exposure to cryptocurrency.
- The proposed BlackRock fund is likely to face strong opposition from the SEC, and the filing could be withdrawn before an ETF is ever launched.
BlackRock, a leading asset management company, has taken a significant step towards launching a spot Bitcoin exchange-traded fund (ETF), a move that has been a subject of debate between cryptocurrency advocates and federal regulators. The firm has submitted an application to the U.S. Securities and Exchange Commission (SEC) to initiate the iShares Bitcoin Trust. If approved, this ETF would provide investors with an easy way to gain exposure to cryptocurrency through a product offered by one of Wall Street’s largest companies.
The SEC has previously resisted the launch of a spot Bitcoin ETF in the U.S., and it is currently engaged in a legal battle with Grayscale over the potential conversion of its Grayscale Bitcoin Trust into an ETF. A decision on this matter is expected later this year. Several other firms have also filed and later withdrawn applications to launch spot Bitcoin funds. If the SEC changes its stance, the market could see a surge in such products.
The proposed BlackRock fund is likely to face strong opposition from the SEC, and the filing could be withdrawn before an ETF is ever launched. This move by BlackRock comes at a time when cryptocurrency prices are significantly below their all-time highs, and the industry is under increased scrutiny in Washington, D.C.
Coinbase, a major cryptocurrency exchange, is listed as the Bitcoin custodian for the proposed BlackRock ETF. BlackRock and Coinbase have an existing strategic partnership, with BlackRock’s institutional investment platform, Aladdin, connected to Coinbase Prime for cryptocurrency trading and custody.
The entry of BlackRock into the Bitcoin ETF space could potentially boost a sector that has had a turbulent start over the past two years. Bitcoin futures ETFs first launched in 2021, but the ProShares Bitcoin Strategy ETF (BITO) is the only one that has grown to a substantial size, with about $800 million in assets. However, the fund has lost more than 40% on a total return basis since its launch.
