BlackRock Files for Spot Bitcoin ETF, a First for the U.S.

BlackRock Files for Spot Bitcoin ETF

Asset management giant BlackRock took the first steps Thursday to launch a spot bitcoin exchange-traded fund (ETF), which has long been a point of contention between crypto advocates and federal regulators. The firm filed an application with the U.S. Securities and Exchange Commission (SEC) to launch the iShares Bitcoin Trust. If approved, the ETF would allow easy access for investors to get exposure to crypto in a product from one of Wall Street’s largest companies.

“This is a significant development for the cryptocurrency industry,” said Eric Balchunas, an ETF analyst at Bloomberg Intelligence. “If approved, it would be the first spot Bitcoin ETF in the U.S., and it would open up the market to a much wider range of investors.”

Coinbase as Crypto Custodian

Coinbase is listed as the Bitcoin custodian for the proposed BlackRock ETF. BlackRock has an existing strategic partnership with Coinbase. The companies announced last year that Aladdin, BlackRock’s institutional investment platform, would be connected to Coinbase Prime for crypto trading and custody.

The two companies had already started to collaborate, sealing the partnership between Blackrock and Coinbase sometime before.

SEC Resistance

The SEC has so far resisted allowing the launch of a spot bitcoin ETF in the U.S. The regulator is currently in a legal battle with Grayscale over whether the firm will be allowed to convert its Grayscale Bitcoin Trust into an ETF. A decision, in that case, is expected later this year. Several other firms have filed and later pulled applications to launch spot Bitcoin funds. If the SEC relents, there could be a flood of those products on the market.

The proposed BlackRock fund will likely face heavy resistance from the SEC, and the filing could be pulled before an ETF is ever launched, said Aisha Hunt, principal at asset management law firm Kelley Hunt & Charles.

The filing by BlackRock for a spot Bitcoin ETF is a major development for the cryptocurrency industry. If approved, it would be the first of its kind in the U.S. and would allow investors to gain exposure to Bitcoin without having to buy and store the asset directly. The approval of a spot Bitcoin ETF by the SEC would be a major milestone for the cryptocurrency industry and would open up the market to a much wider range of investors.