• BlackRock, the largest asset manager globally, has recently submitted a request for a Bitcoin exchange-traded fund (ETF).
• The SEC has yet to approve any Bitcoin ETFs, leaving the fate of BlackRock’s application uncertain.
• An ETF offers higher liquidity than a trust and is subjected to the same regulatory framework as other ETFs.
BlackRock Files for Bitcoin ETF
BlackRock, the world’s largest asset manager, has recently filed for a Bitcoin exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC). This proposed iShares Bitcoin Trust would entrust Coinbase Custody with its custodial duties.
The SEC has yet to grant approval for any applications concerning spot bitcoin ETFs. Past requests from Grayscale Investment LLC, Fidelity, Cboe Global Markets, and NYDIG have all been rejected by the SEC. As such, there remains uncertainty regarding whether BlackRock’s application will be approved or denied by the regulator.
What Sets Apart an ETF From a Trust?
An ETF can be traded on a stock exchange whereas a trust does not possess this feature; consequently it offers higher liquidity than a trust and is subjected to the same regulatory framework as other ETFs. Therefore, an ETF may prove more attractive to investors than a trust in terms of risk management and transparency.
Grayscale Lawsuit Against SEC
In response to their rejection from the SEC, Grayscale Investment LLC filed a lawsuit against them alleging arbitrary rejection of spot bitcoin ETF applications despite prior approval of bitcoin futures ETFs. This case is still ongoing with no clear resolution in sight at present time.
While hopes are high that BlackRock’s application will receive approval from the SEC allowing investors to engage with cryptocurrency through an exchange-traded fund structure, regulatory uncertainty remains until further notice due to past rejections from numerous firms including Grayscale Investment LLC which prompted legal action against the body responsible for approving or denying these requests – The Securities and Exchange Commission (SEC).