The world’s largest investment firm, decides to apply for a spot Bitcoin ETF. It thus joins the queue of applicants awaiting a verdict. However, it is BlackRock, of all the competitors, that has the best chance of success.
BlackRock’s plans for the Bitcoin ETF
BlackRock, a powerful player in the global investment market, has announced its revolutionary plan to create a new type of ETF (bitcoin spot exchange traded fund). This massive venture is expected to be the first cryptocurrency fund of its kind in the United States, as long as it is approved by the relevant institutions.
According to documents filed by BlackRock, Coinbase Custody Trust Company is to become the custodian of the fund’s Bitcoin holdings, while Bank of New York Mellon will be responsible for holding the fiat funds. In practice, this means that the BlackRock iShares Bitcoin Trust will become traded, and investors will be given the opportunity to purchase custodial shares based on actual currencies.
According to the June 15 proposal:
“The shares are designed to simplify the process of investing in BTC and eliminate the associated operational complexity.” Bitcoin’s price will be regularly updated at least every 15 seconds, using the CF Benchmarks index, during standard trading sessions.
The battle for the first U.S. Bitcoin ETF spot continues
Analyzing the information in the document, it is worth noting that existing products available in the spot commodity and currency markets “are generally not regulated, and the Commission has relied on the underlying futures market” as a basis for approving fiduciary holdings in the past. As it further reads:
“Accordingly, the test of a regulated market of significant size does not require the spot bitcoin market to be regulated in order for the Commission to approve this proposal.”
It’s worth noting that despite numerous proposals, to date the Securities and Exchange Commission (SEC) has yet to approve any Bitcoin spot ETF. Grayscale, after the Commission rejected the company’s proposal, took legal action, filing a lawsuit in the Court of Appeals against the SEC to argue for the soundness of this solution.
Canada outperforms the United States
Prominent investor Cathie Wood of ARK Invest and renowned European investment firm 21Shares have not been left behind either, and have been involved in efforts to get Bitcoin spot ETFs approved, filing their third applications in April.
The first-ever spot Bitcoin ETF turned out to be the Canadian Purpose Bitcoin ETF, which debuted on the market as early as early 2021.
This example, and many others, shows that the United States is lagging far behind the rest of the crypto world by not approving its fund with similar characteristics.