The world’s largest wealth manager wants to be successful where others have failed. Because so far, the US Securities and Exchange Commission has rejected all applications for Bitcoin ETF.
Blackrock filed an application with the US Securities and Exchange Commission on Thursday to launch a Bitcoin ETF. With this, the largest wealth manager in the world shows its support for the crypto industry – and this at a time when crypto companies are currently being put under heavy pressure by the SEC.
The asset manager plans to offer a so-called spot ETF (Exchange-Traded Fund) through its ETF subsidiary iShares, which directly tracks Bitcoin prices. In this way, investors could benefit from the Bitcoin price “without buying and trading Bitcoins via a crypto platform or other services,” according to the application to the SEC.
The crypto exchange Coinbase is to take over the safekeeping of the fund’s Bitcoin holdings. The two companies are already linked in a strategic partnership to make it easier for Blackrock institutional investors to trade Bitcoin. If approved, the fund would be traded on the Nasdaq technology exchange.
SEC versus crypto
However, the partner Coinbase is currently in a heated dispute with the SEC: the stock exchange supervisory authority has filed a lawsuit against the US crypto exchange. The accusation: Coinbase is said to have traded cryptocurrencies that are classified as securities by the SEC. Trading with them would therefore be subject to stricter rules that Coinbase failed to comply with. Competitor Binance was also indicted by the SEC for similar reasons. Coinbase boss Brian Armstrong then announced that he wanted to resolve the dispute with the stock exchange supervisory authority on behalf of the entire industry.
The current very strict procedure of the SEC is also met with criticism in the USA, because the US stock exchange supervisory authority relies primarily on lawsuits and penalties, but does not formulate any clear rules for the crypto branch.
While the SEC described several cryptocurrencies such as Solana, Cardano and Polygon as securities in the lawsuits against Binance and Coinbase, its boss Gary Gensler takes a different view of Bitcoin: It is the only cryptocurrency he is willing to publicly trade as a commodity and not as a security designate, Gensler had repeatedly emphasized.
Blackrock is not alone
If approved, Blackrock’s bitcoin ETF would be the first publicly traded crypto spot ETF in the US. However, the asset manager’s move is not the first attempt to get the green light for such an ETF from the US Securities and Exchange Commission. So far, however, the SEC has rejected corresponding applications from at least a dozen other money managers.
In April, crypto company 21 Shares filed its third application for a spot Bitcoin ETF with the SEC. The Swiss even get support from star investor Cathie Wood and her investment company Ark Invest.
However, the SEC has so far considered the Bitcoin ETF to be too susceptible to manipulation and fraud, and investor protection is too low. So far, only ETFs based on Bitcoin futures have been approved in the USA, but not Bitcoin directly. Bitcoin futures make it possible to bet on rising or falling prices.
Grayscale Investments is in a feud with the SEC over the SEC’s denial of the cryptocurrency manager’s request to convert its Grayscale Bitcoin Trust into a spot ETF. Grayscale argues that the decision is arbitrary as the SEC has previously approved ETFs based on Bitcoin futures.
Blackrock’s announcement pushed Bitcoin price above $25,000 on Friday after hitting its lowest level since March at $24,770.
Picture Copyright: sakdinon
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