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$10 Trillion Asset Manager BlackRock Takes Leap into Crypto, Files for Spot Bitcoin ETF with SEC

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Source: Adobe/MichaelVi

Investment giant BlackRock has filed for a spot bitcoin ETF, a product that is yet to get the green light from the Securities and Exchange Commission.

On Thursday, the firm filed an application with the SEC to launch the iShares Bitcoin Trust, which is intended to allow investors to get direct exposure to the flagship cryptocurrency in a secure way. 

“The Shares are intended to constitute a simple means of making an investment similar to an investment in bitcoin rather than by acquiring, holding and trading bitcoin directly on a peer-to-peer or other basis or via a digital asset exchange,” the filing said. 

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

The new iShares Bitcoin Trust will be listed on the Nasdaq exchange and pricing will be calculated daily based on the CF CME Bitcoin Reference Rate, which “aggregates the notional value of Bitcoin trading across major Bitcoin spot exchanges.”

BlackRock is the world’s largest money manager, with $9.1 trillion of assets under management at the end of the first quarter of the year. 

BlackRock’s move to file for a spot bitcoin ETF comes as the SEC has been reluctant to allow the launch of such a product in the US.

The commission has long claimed that spot bitcoin is not safe enough to be offered to retail investors, although funds based on Bitcoin futures are allowed. 

Back in March, the agency denied a request for VanEck to offer a bitcoin ETF, saying that the Cboe division that applied to list the fund had not met requirements that it be “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest” because the underlying spot bitcoin market is too opaque.

SEC Might Not Be Able to Deny BlackRock’s Application Easily

Some experts have noted that while the SEC has been denying applications to launch a spot bitcoin ETF from numerous fund managers, it won’t be able to easily reject BlackRock’s filing due to its political power, which could possibly match that of the SEC and its leader Gary Gensler.

“Given their reputation, this has the highest likelihood of happening out of all the attempts at a spot ETF so far,” crypto market analyst Joe Consorti said in a recent tweet. 

Furthermore, the proposed ETF is benchmarked against the CME CF Bitcoin Reference Rate, which “takes price data exclusively from cryptocurrency exchanges that adhere to the highest possible standards of market integrity and transparency,” cryptocurrency exchange Kraken reportedly said in a comment. 

“This protects investors as products benchmarked against it can then consistently and reliably track the spot price of the underlying asset.”

BlackRock’s filing also comes at a time when the SEC has launched a regulatory battle against crypto companies. 

Last week, the commission sued both Binance, the world’s largest cryptocurrency exchange, and Coinbase, the largest US-based cryptocurrency exchange. 

 


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