BlackRock Files for Bitcoin ETF with SEC
BlackRock has a chance to spot bitcoin ETF
BlackRock, the largest asset manager in the world, has filed an application with the Securities and Exchange Commission (SEC) for a bitcoin exchange-traded fund (ETF). This is significant because BlackRock’s influence in the financial industry has historically carried weight with the SEC. While the SEC rejected BlackRock’s ETF application in 2014 due to lack of transparency, the current application signals a potential change in stance by the regulatory body.
Bitcoin futures funds are not so sought after
In the absence of an approved bitcoin ETF, the SEC has allowed funds based on bitcoin futures contracts. These funds, however, have their limitations, as they are actively managed and often come with an annual fee. Additionally, since futures contracts have an expiration date, the funds need to be “rolled over” to the next contract, causing a deviation from the spot price on crypto exchanges. As a result, the performance of these funds tends to be inferior compared to those that reflect the spot price.
Bitcoin spot ETF can be manipulated without
Despite concerns about market manipulation, experts argue that a bitcoin spot ETF can be safeguarded against such risks. BlackRock aims to collaborate with reputable exchanges like Coinbase and Kraken to quote the bitcoin price for the ETF. These exchanges have high liquidity and public trading information, making it difficult for manipulation to go unnoticed by the SEC. BlackRock also plans to work with Coinbase as a qualified custodian to store the underlying coins securely. Furthermore, a surveillance-sharing agreement with Nasdaq would allow for comprehensive monitoring of investor activity, minimizing the potential for market manipulation.
Potential impact of a approved bitcoin spot ETF
If the SEC approves BlackRock’s bitcoin spot ETF, it would mark a significant milestone for the crypto industry in the United States. The ETF would provide access to bitcoin investments for large institutional investors, including pension funds, attracting a substantial influx of new capital. This could lead to increased market liquidity and mainstream acceptance of bitcoin as an asset class. However, it is important to note that the SEC has consistently rejected proposals for a spot ETF in the past, so the outcome remains uncertain.
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BlackRock’s recent filing for a bitcoin spot ETF with the SEC offers hope for the crypto industry in the United States. The involvement of a major asset manager like BlackRock, along with the proposed measures to address market manipulation concerns, increases the chances of approval. However, until the SEC officially gives the green light, the future of a bitcoin spot ETF in the United States remains uncertain.