BlackRock Inc. is trying its hand at potentially getting the first spot-Bitcoin exchange-traded fund launched in the US.
The world’s largest asset manager on Thursday applied for the iShares Bitcoin Trust, according to a filing with the US Securities and Exchange Commission. Coinbase Global Inc., the biggest crypto exchange in the US, would act as custodian. The ETF, should it launch, would trade on Nasdaq.
There have been about 30 attempts for a spot-Bitcoin product, according to a tally from Bloomberg Intelligence. But applications have faced opposition by regulators, who have in the past cited market concerns and a lack of investor protections, among other things. The SEC, meanwhile, is suing Coinbase, alleging that it is running an illegal exchange. The company has said that a lack of clear rules for the digital-assets industry is hurting America’s economic competitiveness.
“One might say that they are about as good as it gets at reading the regulatory tea leaves,” said James Seyffart at Bloomberg Intelligence, referencing BlackRock. The New York-based asset manager oversaw more than $9 trillion as of the end of March.
Cryptocurrency backers have long argued that such a product should be made available for trading. The filing appears to have lifted the price of Bitcoin, which gained about 2.7% to around $25,620 on Thursday after the disclosure. The biggest digital asset by market value had touched $24,770 earlier, the lowest since March.
The filing was earlier partially reported by crypto-site CoinDesk.
“We have filed a registration statement with the SEC, and due to regulatory filing restrictions, we are not able to provide further comment,” a BlackRock spokeswoman said in an emailed statement.
BlackRock’s attempt at a spot Bitcoin ETF lands amid digital asset-manager Grayscale Investments LLC’s high-profile legal battle with the SEC. Grayscale sued the regulator after it denied a bid to convert the Grayscale Bitcoin Trust into a physically backed ETF, citing fraud and manipulation concerns related to the underlying market.
“Perhaps BlackRock is in agreement with us in Bloomberg Intelligence that Grayscale is going to win their lawsuit with the SEC and they want to make sure their hat is in the ring in the event of an approval,” Seyffart said.
BlackRock has prior dealings with the crypto space. The company had partnered with Coinbase on making it easier for institutional investors to manage and trade Bitcoin.
Lots of issuers have over the years filed for spot-Bitcoin exchange-traded funds, though regulators have in the past been hesitant to green-light such a product. More recently, crypto exchange-traded-products issuer 21Shares, in partnership with Cathie Wood’s ARK Investment Management, refiled an application for a spot-Bitcoin ETF, arguing that such a fund would offer US investors protections that currently don’t exist.
--With assistance from Silla Brush.
(Corrects, in the third paragraph, the number of attempts by issuers to try for a spot product. The story originally ran June 15.)
Author: Vildana Hajric, Sonali Basak and Katie Greifeld
