On Thursday, BlackRock, the largest asset manager globally, submitted a request for a bitcoin exchange-traded fund (ETF), providing investors with an opportunity to invest in the cryptocurrency. This move comes at a time when regulatory scrutiny around digital assets has intensified.
According to the filing made with the US Securities and Exchange Commission (SEC), BlackRock’s iShares Bitcoin Trust will employ Coinbase Custody as its custodian. It’s worth noting that the SEC has not yet approved any applications for ETFs focused on spot bitcoin trading.
In the previous year, BlackRock introduced a spot Bitcoin private trust exclusively for institutional clients based in the United States.
The timing of BlackRock’s decision to file for a Bitcoin ETF coincides with increased regulatory attention on the global cryptocurrency industry. The US securities regulator has been particularly focused on addressing potential violations of securities laws within the sector.
Joshua Chu, the group chief risk officer at blockchain technology group XBE, collectibles, and Marvion, expressed a positive outlook on BlackRock’s filing for a Bitcoin ETF.
He highlighted that the involvement of a reputable and established asset management company like BlackRock could be perceived as a favorable development in the ongoing efforts to obtain regulatory approval for such ETFs.
This sentiment suggests that BlackRock’s involvement may contribute to enhancing the credibility and legitimacy of the cryptocurrency industry in the eyes of regulators.
Furthermore, BlackRock’s filing for a Bitcoin ETF also signifies the enduring public interest in cryptocurrencies. If approved, a spot bitcoin ETF would enable investors to gain exposure to bitcoin’s market price without directly purchasing the cryptocurrency itself. This approach has been advocated by supporters of ETFs as a way to broaden access to Bitcoin for investors.
It’s worth noting that the SEC rejected Grayscale Investment LLC’s application in 2021 to convert its prominent spot Grayscale Bitcoin Trust into an ETF. This decision highlights the challenges and regulatory hurdles faced by companies seeking approval for bitcoin ETFs in the past. The outcome of BlackRock’s application will be closely watched by industry participants and investors alike.
In response to the SEC’s rejection of applications for spot bitcoin ETFs, while approving bitcoin futures ETFs, Grayscale filed a lawsuit against the regulator, alleging arbitrary decision-making. Other companies, including Fidelity, Cboe Global Markets, and NYDIG, have also had their proposals for spot bitcoin ETFs rejected by the SEC.
Following BlackRock’s announcement of filing for a bitcoin ETF, bitcoin prices experienced a 2 percent increase on Thursday. As of Friday, bitcoin was trading at $25,506, reflecting a year-to-date increase of 54 percent.
CoinDesk had previously reported on the plans for BlackRock’s ETF before the official announcement was made.
