BlackRock, the world’s largest asset manager overseeing approximately US$10 trillion, has submitted a filing to the Securities and Exchange Commission (SEC) seeking approval to launch the first publicly traded Bitcoin exchange-traded fund (ETF) in the United States. This move comes amidst ongoing lawsuits by U.S. regulators against cryptocurrency platforms for potential violations of securities laws.
In the filing made on Thursday, BlackRock outlined its plans to introduce the “iShares Bitcoin Trust” and has selected Coinbase Custody Trust Co. to serve as the custodian for the Bitcoin holdings. If approved, the ETF will be listed on Nasdaq.
However, the SEC’s recent legal action against major crypto exchanges Coinbase and Binance.US has created uncertainties regarding the ETF’s approval. This is due to the involvement of a Coinbase unit as the custodian for the proposed product.
Eric Balchunas, a senior ETF analyst at Bloomberg, tweeted Thursday that the BlackRock filing is a “shocker.”
“There’s been no signs at all SEC willing to approve, but BlackRock is very connected so maybe they know something?” Balchunas said.
The endorsement of a Bitcoin ETF that is traded on the spot market in the largest economy and most prominent financial market worldwide is perceived by numerous investors as a validation of the digital currency. Such approval is expected to open the doors for substantial institutional investments in Bitcoin.
Nevertheless, a portion of the crypto industry responded unfavorably to the news regarding BlackRock, citing theories related to “Operation Chokepoint.” These theories propose that governments and traditional financial institutions are attempting to undermine the industry due to the perceived threat it poses to their own interests.
“If BlackRock’s spot ETF application gets approved, it is undeniable that Operation Chokepoint 2.0 was orchestrated to drive out crypto native companies and bring in large traditional firms that are buddy-buddy with the U.S. [government] to try and control Bitcoin [and] crypto,” Will Clemente, co-founder of digital asset research firm Reflexivity Research, said Thursday on Twitter to his 683,700 followers.
In the SEC filing, BlackRock said: “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,”
Prior to this, the Securities and Exchange Commission (SEC) had previously denied applications for spot Bitcoin ETFs from Grayscale, WisdomTree, and VanEck. In June 2022, Grayscale filed a lawsuit against the SEC after their application was rejected, claiming that the regulator did not provide consistent treatment to similar investment products.
Nevertheless, the SEC has granted approval for several Bitcoin futures-based ETFs.