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On Thursday afternoon, the iShares division of BlackRock (BLK), a leading fund management company, submitted documentation to the U.S. Securities and Exchange Commission (SEC) to establish a Bitcoin (BTC) exchange-traded fund (ETF).
To be named the iShares Bitcoin Trust, the fund's assets are to "consist primarily of bitcoin held by a custodian on behalf of the Trust," according to the filing. That custodian will by crypto exchange Coinbase (COIN), said the filing.
Earlier on Thursday, CoinCryptoUs reported that BlackRock plans to file for a bitcoin ETF in the near future.
While the SEC has granted approval for several bitcoin ETFs based on futures, it has notably turned down efforts by fund management companies such as Grayscale, VanEck, and WisdomTree to establish a spot bitcoin ETF.
BlackRock, on the other hand, might pose a greater challenge for the SEC to dismiss. As the world's largest asset manager, BlackRock oversees a staggering $10 trillion in assets under management (AUM). Moreover, the company, along with its CEO Larry Fink, wields substantial political influence that could potentially rival that of the SEC and its leader, Gary Gensler.
"The proposed ETF is benchmarked against the CME CF Bitcoin Reference Rate," stated Sui Chung, CEO of CF Benchmarks, a subsidiary of Kraken, a cryptocurrency exchange, while providing insight on the application.
"CF Benchmarks takes price data exclusively from cryptocurrency exchanges that adhere to the highest possible standards of market integrity and transparency. This protects investors as products benchmarked against it can then consistently and reliably track the spot price of the underlying asset," Chung added.
The decision comes amidst a period of heightened regulatory scrutiny in the crypto industry, with recent lawsuits by the SEC against major exchanges Coinbase and Binance. However, the market sentiment appears to have received a slight uplift following the submission of an ETF application by a prominent traditional finance (TradFi) company. This positive development has led to a modest increase in the price of Bitcoin, which rose to nearly $25,600.
“BlackRock’s increasing engagement shows Bitcoin continues to be an asset of interest for some of the world’s largest financial institutions,” said Chung.
