- BlackRock, the world’s largest investment company, applies for a Bitcoin spot exchange-traded fund (ETF), a U.S. first if it gets the green light.
- The proposed ETF, BlackRock’s iShares Bitcoin Trust, aims to eliminate the complexities and operational hurdles inherent in direct Bitcoin investment.
In an unprecedented move, investment behemoth BlackRock has submitted an application to establish a Bitcoin spot exchange-traded fund (ETF). If approved, this ETF will be the first of its kind in the U.S., marking a significant shift in the nation’s financial and cryptocurrency sectors.
Nasdaq’s filing with the U.S. Securities and Exchange Commission (SEC) reveals the intricate details of this landmark initiative. Coinbase Custody Trust Company will hold the fund’s Bitcoin assets, while the Bank of New York Mellon will manage its fiat currency. The proposed ETF, named ‘BlackRock’s iShares Bitcoin Trust’, will trade as Commodity-Based Trust Shares.
According to the application submitted on June 15, the goal of these shares is to simplify the investment process in Bitcoin by removing the complexities and operational burdens that often deter direct investment in the cryptocurrency. To ensure accuracy and transparency, the Bitcoin price will be updated at least every 15 seconds during regular market trading, as per the CF Benchmarks Index.
Interestingly, the document underscores that previously approved spot exchange-traded products in the commodities and currency markets generally operate unregulated. The SEC, historically, has relied on the underlying futures market as the basis for approval of these products. Consequently, it is not necessary for the spot Bitcoin market to be regulated for the Commission to approve this proposal.
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Despite numerous applications, the SEC has yet to approve a spot Bitcoin ETF. Notably, Grayscale appealed against the SEC’s rejection of its application to establish a spot Bitcoin ETF, taking the matter to the appeals court to argue the viability of Bitcoin futures.
BlackRock’s initiative is the latest in a series of attempts to gain approval for a spot Bitcoin ETF in the U.S., with notable applications from Cathie Wood’s ARK Invest and European investment firm 21Shares.
As the global financial sector continues to evolve, the world’s first spot-traded Bitcoin ETF was launched by Canada’s Purpose Bitcoin ETF in early 2021, setting a precedent for other markets to follow. Now, all eyes are on BlackRock and the SEC as the U.S. potentially stands on the brink of its own Bitcoin ETF revolution.
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