Financial giant BlackRock, a company that manages more than nine trillion dollars in assets, took the first steps on Thursday to launch a spot exchange-traded fund (ETF) for bitcoin, a long-debated topic between cryptocurrency advocates and federal regulators. .
The company has filed an application with the US Securities and Exchange Commission (SEC) to launch the iShares Bitcoin Trust. If approved, the ETF would allow investors to easily access cryptocurrency exposure through a product from one of Wall Street's biggest companies.
“The Shares are intended to be a simple means of making an investment similar to an investment in bitcoin, rather than by directly purchasing, holding and trading bitcoin on a peer-to-peer or other basis or through an exchange of digital assets", it is mentioned in the submitted application 1 .
So far, the SEC has resisted allowing a bitcoin spot ETF to launch in the US. The regulator is currently in a legal battle with Grayscale over whether the firm will be allowed to turn the Grayscale Bitcoin Trust into an ETF. A decision in this case is expected later this year 1 .
Several other firms have filed and then withdrawn applications to launch bitcoin spot funds. If the SEC relents, there could be an avalanche of such products on the market 1 .
ETFs typically take months to launch after the initial filing, if they ever begin trading. BlackRock's proposed fund is likely to face strong resistance from the SEC, and the filing could be withdrawn before an ETF is ever launched, said Aisha Hunt, principal at asset management law firm Kelley Hunt & Charles 1 .
BlackRock's move comes at a time when cryptocurrency prices remain well below their all-time highs and the industry faces increasing scrutiny in Washington, DC 1 .
The SEC recently sued Coinbase and Binance for allegedly operating unregulated stock exchanges. The SEC also accused Binance of commingling customer funds with its own 1 .
Coinbase is listed as the bitcoin custodian for BlackRock's proposed 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 trading and custody.