BlackRock, the world’s largest investment company, has recently made a groundbreaking move by filing an application for a Bitcoin spot exchange-traded fund (ETF) in the United States. If approved, this would mark the first crypto spot ETF in the country. The application, submitted on June 15, highlights BlackRock’s commitment to simplifying access to Bitcoin investments and removing operational complexities for investors.
Custodians and Trading:
According to Nasdaq’s filing with the U.S. Securities and Exchange Commission, Coinbase Custody Trust Company is poised to become the custodian for the fund’s Bitcoin holdings, while the Bank of New York Mellon will safeguard its fiat assets. Trading under the name Commodity-Based Trust Shares, BlackRock’s iShares Bitcoin Trust aims to offer a seamless investment experience, with real-time Bitcoin price updates occurring at least every 15 seconds during regular market trading. The price data will be sourced from the CF Benchmarks Index, ensuring accurate and reliable information for investors.
Regulatory Considerations:
BlackRock’s application recognizes that previously approved spot exchange-traded products in commodities and currency markets have often operated without specific regulations. These products relied on the underlying futures market as the basis for regulatory approval. As a result, the application argues that the spot Bitcoin market need not be regulated for the Securities and Exchange Commission to greenlight the proposal, emphasizing the potential for innovation in the evolving cryptocurrency landscape.
Challenges and Competition:
Despite the surge in applications for a spot Bitcoin ETF, the Securities and Exchange Commission has yet to approve one. Grayscale, a prominent cryptocurrency asset manager, even took the SEC to appeals court after its application for a spot Bitcoin ETF was rejected. Other influential players like Cathie Wood’s ARK Invest and European investment firm 21Shares have also been pushing for spot Bitcoin ETF approval, having filed their third applications in April. Notably, Canada’s Purpose Bitcoin ETF became the world’s first spot-traded Bitcoin ETF when it launched in early 2021.
BlackRock’s move to file an application for a Bitcoin spot ETF demonstrates its commitment to expanding investment opportunities in the cryptocurrency market. By offering a simplified and regulated investment vehicle, BlackRock aims to remove the barriers that have deterred some investors from directly accessing Bitcoin. As the world awaits the SEC’s decision, the crypto community eagerly anticipates the potential for increased adoption and mainstream acceptance of Bitcoin as an investment asset class.
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