BlackRock Applies to Launch a Bitcoin Spot ETF, Marking a Potential First in the US

BlackRock, the world's largest investment firm, has officially submitted an application to establish a Bitcoin spot exchange-traded fund (ETF) in the United States. If the application is granted, it will become the first-ever crypto spot ETF in the US.

As reported in a Nasdaq stock exchange filing with the U.S. Securities and Exchange Commission (SEC), the proposed custodian of the fund's Bitcoin assets would be Coinbase Custody Trust Company. Meanwhile, the Bank of New York Mellon would custody of the fund's fiat holdings. The product, BlackRock's iShares Bitcoin Trust, is intended to be listed as Commodity-Based Trust Shares.

The application, filed on June 15th, explains that “The Shares have been designed to remove the obstacles represented by the complexities and operational burdens involved in a direct investment in Bitcoin.”

The Bitcoin spot price for the proposed ETF would be updated “at a minimum” every 15 seconds during the standard market trading hours, as per the CF Benchmarks Index.

The submitted document also highlights the past approval of spot exchange-traded products within the commodities and currency markets. Noting that these markets “are generally unregulated,” and that “the Commission had based its approval of trust shares on the underlying futures market.” Therefore:

“As such, the regulated market of significant size test does not require that the spot bitcoin market be regulated in order for the Commission to approve this proposal.”

Despite various applications, the SEC has yet to approve a Bitcoin spot ETF. Grayscale, another applicant, previously appealed to the court after the SEC denied its application to create a Bitcoin spot ETF. Grayscale argued in favor of the solidity of Bitcoin futures.

In addition, ARK Invest, led by Cathie Wood, and European investment firm 21Shares, has been ardently advocating for the approval of a spot Bitcoin ETF. The firms submitted their third respective applications in April.

The honor of launching the first spot-traded Bitcoin ETF goes to Canada's Purpose Bitcoin ETF, which was established in early 2021.

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