BlackRock Bitcoin ETF, Bullish for Bitcoin
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BlackRock, a renowned Wall Street giant, has filed documents with the United States Securities and Exchange Commission (SEC) to launch a spot Bitcoin exchange-traded fund (ETF) on Nasdaq. With assets under management (AUM) exceeding $9 trillion, the news of BlackRock's ETF application has generated significant excitement. This is notable considering the SEC's history of rejecting similar products in the US market.
Coinbase to Act as Custodian
BlackRock's proposed ETF, named iShares Bitcoin Trust, will track the spot value of Bitcoin using a price reference rate provided by CF Benchmarks, a subsidiary of Kraken. The trust's Bitcoin holdings will be safeguarded by Coinbase, serving as the custodian. If approved, this Bitcoin ETF would offer investors a regulated avenue to access the leading cryptocurrency without the need to directly own or store the asset. Despite previous rejections by the SEC due to concerns about market manipulation, several companies have pursued similar offerings in the past. Notably, the regulator has granted approval for the launch of at least three Bitcoin futures ETFs, which has led to legal challenges against the agency. In 2022. Grayscale filed a lawsuit against the SEC after its application to convert its Bitcoin trust into a spot Bitcoin ETF was denied. The firm's CEO, Michael Sonnenshein, criticized the SEC's approach, stating that the regulator was acting in an "arbitrary and capricious" manner by approving Bitcoin futures ETFs while rejecting spot Bitcoin ETFs.
Potential Significance of BlackRock's ETF
The impact of BlackRock's application remains uncertain. However, industry participants, including Galaxy Digital CEO Mike Novogratz, believe that the approval of a spot Bitcoin ETF would be highly beneficial for the leading cryptocurrency. Currently. Bitcoin faces significant downward pressure amid SEC lawsuits against Coinbase and Binance. Novogratz expressed this sentiment on Twitter, stating that "BlackRock getting a BTC ETF through would be the best thing that could happen to BTC.
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