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Exciting developments are taking place in the crypto-industry as BlackRock, the world's largest asset manager, recently declared its plan to introduce the first Bitcoin exchange-traded fund (ETF) in the United States. This announcement is seen as a favorable development amidst the ongoing struggle between the crypto industry and the U.S. Securities and Exchange Commission (SEC) for regulatory acknowledgment and direction.
BlackRock's Bet on Bitcoin ETF
After the bell Thursday, BlackRock — the world's largest asset manager — filed for a spot Bitcoin ETF, with Coinbase serving as its crypto custodian. This alliance is seen as a significant step in legitimizing cryptocurrencies in traditional finance. The new fund, titled the iShares Bitcoin Trust, will store Bitcoin with Coinbase’s Custody Trust unit.
A Potential Game-Changer Amid Regulatory Challenges
BlackRock's filing is significant as it comes at a time when the SEC has blocked similar efforts to launch spot Bitcoin ETFs. Grayscale Investments has sued the SEC, seeking to convert its Bitcoin trust into the first spot Bitcoin ETF listed in the United States.
The SEC's stance has also been increasingly stringent on crypto platforms and brokers, including Coinbase, which it sued earlier this month along with Binance on charges including operating as an unregistered securities exchange.
Eric Balchunas, a Senior ETF Analyst at Bloomberg, called BlackRock's move a "shocker," noting that while there have been no signs of the SEC's willingness to approve such a fund, BlackRock's connections may give it an edge, as quoted on etf.com.
BlackRock's Existing Crypto Endeavours
BlackRock already operates the iShares Blockchain and Tech ETF (IBLC - Free Report) , an ETF that invests in Bitcoin's supporting technology, which has seen a massive 75% surge this year. Despite the ongoing lawsuits, crypto and blockchain ETFs have been among the best-performing funds this year. For example, the Global X Blockchain ETF (BKCH - Free Report) has more than doubled since the year began, while the First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT - Free Report) has added 46%. Bitwise Crypto Industry Innovators ETF (BITQ) surged about 102% this year.
Long Road to a Bitcoin ETF
If approved, the iShares Bitcoin Trust would become the first approved ETF in the U.S. to track the price of Bitcoin, versus the futures contracts tied to the cryptocurrency. The quest for a Bitcoin ETF has been a long one, with every application submitted to the SEC over the past decade being rejected citing reasons related to surveillance-sharing agreements and the unique characteristics of the Bitcoin market.
One of the most recent examples of this stance is the SEC's disapproval of the VanEck Bitcoin Trust filing. The timing of BlackRock's application, coming a week after the SEC sued its crypto custody partner, Coinbase, for violating securities laws, has raised eyebrows.
Bottom Line
BlackRock's move suggests a level of confidence in the potential of a Bitcoin ETF. Moreover, an approved Bitcoin ETF could lead to significant inflows of institutional capital into the Bitcoin market, potentially increasing liquidity and stabilizing prices.
Should the SEC continue to reject Bitcoin ETFs, it would continue to present a significant barrier to institutional investment in Bitcoin. The institutionalization of Bitcoin through approved ETFs could add an additional layer of legitimacy to the asset and potentially increase its adoption.
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Could BlackRock Break the Bitcoin ETF Barrier?
Exciting developments are taking place in the crypto-industry as BlackRock, the world's largest asset manager, recently declared its plan to introduce the first Bitcoin exchange-traded fund (ETF) in the United States. This announcement is seen as a favorable development amidst the ongoing struggle between the crypto industry and the U.S. Securities and Exchange Commission (SEC) for regulatory acknowledgment and direction.
BlackRock's Bet on Bitcoin ETF
After the bell Thursday, BlackRock — the world's largest asset manager — filed for a spot Bitcoin ETF, with Coinbase serving as its crypto custodian. This alliance is seen as a significant step in legitimizing cryptocurrencies in traditional finance. The new fund, titled the iShares Bitcoin Trust, will store Bitcoin with Coinbase’s Custody Trust unit.
A Potential Game-Changer Amid Regulatory Challenges
BlackRock's filing is significant as it comes at a time when the SEC has blocked similar efforts to launch spot Bitcoin ETFs. Grayscale Investments has sued the SEC, seeking to convert its Bitcoin trust into the first spot Bitcoin ETF listed in the United States.
The SEC's stance has also been increasingly stringent on crypto platforms and brokers, including Coinbase, which it sued earlier this month along with Binance on charges including operating as an unregistered securities exchange.
Eric Balchunas, a Senior ETF Analyst at Bloomberg, called BlackRock's move a "shocker," noting that while there have been no signs of the SEC's willingness to approve such a fund, BlackRock's connections may give it an edge, as quoted on etf.com.
BlackRock's Existing Crypto Endeavours
BlackRock already operates the iShares Blockchain and Tech ETF (IBLC - Free Report) , an ETF that invests in Bitcoin's supporting technology, which has seen a massive 75% surge this year. Despite the ongoing lawsuits, crypto and blockchain ETFs have been among the best-performing funds this year. For example, the Global X Blockchain ETF (BKCH - Free Report) has more than doubled since the year began, while the First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT - Free Report) has added 46%. Bitwise Crypto Industry Innovators ETF (BITQ) surged about 102% this year.
Long Road to a Bitcoin ETF
If approved, the iShares Bitcoin Trust would become the first approved ETF in the U.S. to track the price of Bitcoin, versus the futures contracts tied to the cryptocurrency. The quest for a Bitcoin ETF has been a long one, with every application submitted to the SEC over the past decade being rejected citing reasons related to surveillance-sharing agreements and the unique characteristics of the Bitcoin market.
One of the most recent examples of this stance is the SEC's disapproval of the VanEck Bitcoin Trust filing. The timing of BlackRock's application, coming a week after the SEC sued its crypto custody partner, Coinbase, for violating securities laws, has raised eyebrows.
Bottom Line
BlackRock's move suggests a level of confidence in the potential of a Bitcoin ETF. Moreover, an approved Bitcoin ETF could lead to significant inflows of institutional capital into the Bitcoin market, potentially increasing liquidity and stabilizing prices.
Should the SEC continue to reject Bitcoin ETFs, it would continue to present a significant barrier to institutional investment in Bitcoin. The institutionalization of Bitcoin through approved ETFs could add an additional layer of legitimacy to the asset and potentially increase its adoption.