BlackRock, a leading asset management company, has officially applied for a license with the United States (US) Securities and Exchange Commission (SEC) to provide Bitcoin spot exchange-traded fund (ETF) services. The filing was made on June 15, 2023 and if approved, would be the first legally recognized Bitcoin spot ETF in the US.
BlackRock is one of the largest investment management companies, reportedly managing assets of US$9.5 trillion in the first quarter of 2023.
In a filing with the SEC, Coinbase has been selected as the custodian institution for the Bitcoin assets held in the fund. Meanwhile, BNY Mellon will act as a custodian institution for fiat assets. BlackRock's iShares Bitcoin Trust will trade as Commodity Based Trust Shares (CBTS).
“These shares can be a Bitcoin investment vehicle without investors needing to acquire, hold, and trade Bitcoin directly or peer-to-peer through digital asset exchanges,” BlackRock said in the filed document.
With this step, BlackRock aims to provide investors with easy and secure access to investing in Bitcoin. Through ETFs, investors can acquire Bitcoin in a similar way to purchasing shares, eliminating the need to worry about security or storage issues.
BlackRock Collaboration With Nasdaq
Not only has BlackRock filed an application with the SEC, but they also have plans to list this Bitcoin Spot ETF on the Nasdaq exchange. This collaboration is an important step for BlackRock in shaping investors' new perception of Bitcoin and creating a new paradigm in investment.
More Spot ETFs Have Been Rejected by SEC
The issues surrounding Bitcoin ETF services have been a controversial topic among the crypto community and US regulators for a long time. To date, there has been no decision from the SEC to allow a spot Bitcoin ETF, although many applications have been submitted by various parties.
Even though there have been many applications submitted, including from Grayscale, on June 30 2022, the SEC rejected the application. Other companies such as VanEck, Ark Investment, and WisdomTree also submitted similar applications but were also rejected by the SEC.
One of the main factors making the SEC hesitant to approve a spot Bitcoin ETF is concerns about market manipulation and the lack of oversight that occurs across cryptocurrency exchanges.