Blackrock Files For Bitcoin ETF to Allow Cryptocurrency Exposure to Investors

The US SEC sued major exchanges Coinbase and Binance in high-profile lawsuits earlier this month that reverberated through the digital assets industry.

Blackrock Files For Bitcoin ETF to Allow Cryptocurrency Exposure to Investors

Photo Credit: Reuters

BlackRock's iShares Bitcoin Trust will use Coinbase Custody as its custodian

Highlights
  • US SEC has yet to approve any applications for spot bitcoin ETFs
  • A spot bitcoin ETF would track bitcoin's underlying market price
  • ETF would give investors exposure to bitcoin without directly buying it
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BlackRock, the world's biggest asset manager, on Thursday filed for a bitcoin exchange-traded fund (ETF) that would allow investors to get exposure to the cryptocurrency, as the asset class comes under intense regulatory scrutiny.

BlackRock's iShares Bitcoin Trust will use Coinbase Custody as its custodian, according to a filing with the US Securities and Exchange Commission (SEC). The U.S. regulator has yet to approve any applications for spot bitcoin ETFs.

Last year, BlackRock launched a spot bitcoin private trust for institutional clients in the United States.

The move comes at a time when the global cryptocurrency industry has been caught in the crosshairs of the US securities regulator on alleged violations of securities laws.

Earlier this month, the regulator sued major exchanges Coinbase and Binance in high-profile lawsuits that reverberated through the digital assets industry.

"The fact that BlackRock, a well-respected and established asset management company, has filed for a Bitcoin ETF could be seen as a positive development in the quest for regulatory approval," said Joshua Chu, group chief risk officer at blockchain technology group XBE, Coinllectibles and Marvion.

"It also shows resilience of the public's interest in crypto."

A spot bitcoin ETF would track bitcoin's underlying market price. Proponents say an ETF would give investors exposure to bitcoin without directly buying it.

The SEC rejected Grayscale Investment LLC's application last year to convert its flagship spot Grayscale Bitcoin Trust into an ETF.

Grayscale sued the SEC, claiming that the regulator was acting arbitrarily in rejecting applications for spot bitcoin ETFs when it had previously approved bitcoin futures ETFs.

The SEC has also rejected proposals for spot bitcoin ETFs from firms including Fidelity, Cboe Global Markets and NYDIG.

Bitcoin prices closed up 2 percent on Thursday after the announcement. They were last at $25,506 (roughly Rs. 20,88,900) on Friday. The largest cryptocurrency is up 54 percent in the year.

Plans for BlackRock's ETF were reported by CoinDesk earlier in the day.

© Thomson Reuters 2023


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