BlackRock joins ranks of US bitcoin ETF hopefuls

The world’s largest asset manager is angling to do something scores of its competitors have tried, and failed, to do: launch a spot bitcoin product in the US.

BlackRock, which managed $9.1 trillion in assets through March, outlined plans for its iShares Bitcoin Trust in a Thursday SEC filing.

Coinbase would serve as custodian of the trust’s bitcoin holdings, pending SEC approval of the product. The SEC sued the crypto exchange last week for allegedly operating as an unregistered exchange — a charge the company has denied.

BlackRock partnered with Coinbase last August, connecting the fund group’s investment platform, Aladdin, with Coinbase Prime — extending crypto trading, custody, prime brokerage and reporting capabilities to BlackRock clients. 

The planned product would use a bitcoin reference rate from CF Benchmarks, a Kraken subsidiary that collects price data from exchanges to consistently track spot pricing.

“An estimated 20% of Americans have now owned bitcoin at some point,” CF Benchmarks CEO Sui Chung said in a statement. “BlackRock’s proposed ETF potentially offers the other 80% an option that is altogether more familiar and accessible.”

Fund issuers have tried for years to launch spot bitcoin ETFs in the US, to no avail.  

Though regulators in other countries have greenlit products that invest in bitcoin (BTC) directly, the SEC has cited concerns around market manipulation among its reasons for blocking them. 

The regulator has permitted ETFs that invest in bitcoin futures contracts to come to market.

Grayscale Investments, which sued the SEC last year after it blocked the company’s efforts to convert its flagship Bitcoin Trust (GBTC) to an ETF has noted that those approvals, in part, make the regulator’s rejection of a spot bitcoin ETF “arbitrary and capricious.”

David Hirsch, chief of the crypto asset and cyber unit within the SEC’s division of enforcement, said at a conference on Wednesday that prospective spot bitcoin ETF issuers have not established that there is “an adequate system of surveillance” comparable to trading on a registered exchange.  

Prior to its link-up with Coinbase, BlackRock launched its iShares and Blockchain Tech ETF (IBLC) in April 2022. 

IBLC’s assets under management sit at a scant $7 million after more than a year on the market — despite the fund being up 75% year to date.  

BlackRock CEO Larry Fink has also expressed bullishness in crypto’s underlying tech over the past year, saying during a New York Times summit last November that tokenizing securities is “the next generation for markets.”

Updated June 15, 2023 at 5:40 pm ET: Added comment from CF Benchmarks CEO. Added details on the product’s bitcoin reference rate and Coinbase’s SEC lawsuit.

Comments

Post a Comment

Popular posts from this blog

Shiba Inu Mainnet Registers Increased Activity Alongside Shibarium's Puppynet

Image
Shibarium’s native testnet, Puppynet, has been making a lot of noise of late. As reported recently, the test network processed more than 1 million transactions with the assistance of more than 200k unique wallets. Interestingly, there has been a corresponding network growth on the main Shiba Inu network as well. The latest data from IntoTheBlock revealed that the number of new and active addresses on the network increased by 5.29% and 7.55% respectively over the past week. Basically, an address is considered to be active when it becomes a direct participant in a successful transaction. New addresses, on the other hand, gauge the number of fresh entrants into the ecosystem. According to the thumb rule, the higher both the numbers, the better, for they hint towards refining participation by traders/investors. Thus, it can be said that the latest uptrend registered on both these fronts is quite an encouraging sign. Source: ITB Also Read – Shiba Inu: ‘Puppynet’ Processes 1 M
Read more

Bitwise withdraws Bitcoin and Ethereum ETF application

Bitwise Asset Management has withdrawn its application for a Bitcoin and Ethereum Market Cap Weight Strategy ETF. Bitwise Asset Management has withdrawn its application for a Bitcoin (BTC) and Ether (ETH) Market Cap Weight Strategy exchange-traded fund. It was initially filed with the U.S. Securities and Exchange Commission on Aug. 3. This decision follows a period of increased optimism in the crypto market after Grayscale secured approval for its own ETF from the SEC. Bitwise’s Chief Investment Officer, Matt Hougan, had expressed support for the SEC’s approval of crypto ETFs in a previous interview with Bloomberg. The planned ETF was designed to invest in futures contracts for either Bitcoin or Ethereum, guided by their respective market capitalizations. In addition, Bitwise was concurrently collaborating with ProShares to initiate another ETF. The company’s official statement on the withdrawal noted, “The Trust no longer intends to seek effectiveness of the Fund and no securi
Read more

Short-Term Profit Seekers Flee Overvalued Hype Coins, Sparking Sell-Off

Crypto analyst VIKTOR identifies a notable pattern in the bearish altcoin market.  He pointed to sharper declines in tokens like BIGTIME, WLD, and JTO during a recent liquidation. Trends of a stronger presence in perpetual contracts and short-term profit-seeking motives were also observed. Amid the bearish trend rocking the altcoin market since the start of the new year, a crypto analyst has spotted a noteworthy pattern in the downward trajectory of some tokens that fit into a specific category. In a recent tweet, crypto analyst VIKTOR called attention to an observation from the January 3 market turbulence, wildly dubbed “liquidation day.” VIKTOR highlighted that while most altcoins experienced a substantial downturn of approximately 30%, he pointed out a distinctive trend among specific tokens that saw even more significant drops. Specifically, he noted that sensational coins such as BIGTIME, Pyth Network (PYTH), MEME, TOKEN, Worldcoin (WLD), and Jito (J
Read more