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The $10 trillion asset management firm BlackRock submitted a filing to the Securities and Exchange Commission (SEC) on Thursday to initiate a Bitcoin Spot ETF, a product that has yet to be introduced in the United States.
BlackRock intends to collaborate with Coinbase to offer custody for the Bitcoin that underpins the funds, similar to its Bitcoin trading service announced last year.
BlackRock’s ETF Proposal
According to CNBC, the asset manager has filed with the SEC to establish the iShares Bitcoin Trust, which aims to provide straightforward access to Bitcoin for investors through a prominent Wall Street entity.
“The Trust seeks to reflect generally the performance of the price of bitcoin,” states the filing. “The assets of the Trust consist primarily of bitcoin held by the Bitcoin Custodian on behalf of the Trust.
The filing further indicated that shares in the trust are designed to offer a straightforward method for investing in Bitcoin, as opposed to trading and holding it on a peer-to-peer basis.
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Other companies have spent years attempting to launch a comparable product but have consistently faced rejections from the SEC. In contrast, the agency has approved several Bitcoin Futures ETFs, which are supported by Bitcoin futures contracts instead of actual BTC.
The SEC favors the futures product because the market for its underlying assets is monitored by the Chicago Mercantile Exchange (CME), which aids in identifying market manipulation.
Can BlackRock Succeed?
Grayscale’s spot ETF application was denied last year as it sought to establish a surveillance-sharing agreement with the CME Bitcoin Futures market, which the SEC deemed insufficiently related to the spot Bitcoin market.
Grayscale has since filed a lawsuit against the SEC, and judges overseeing the case have shown skepticism regarding the SEC’s rationale.
BlackRock stated it would assess the value of the Bitcoin in its trust daily, referencing the CF Benchmarks Index.
The Index monitors the price of Bitcoin across Coinbase, Bitstamp, iBit, Kraken, Gemini, and LMAX Digital, aiming for “resistance to manipulation” while excluding “any futures prices in its methodology.”
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