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(Kitco News) - BlackRock, the world’s largest asset manager, has filed an application for a spot Bitcoin (BTC) exchange-traded fund (ETF), according to a document filed with the SEC on Thursday.
CoinDesk was first to report on the development, with sources indicating that the asset manager plans to utilize Coinbase Custody for the ETF, while the exchange’s spot market data will be used for pricing.
The filing by BlackRock confirms this structure. “The iShares Bitcoin Trust (the “Trust”) is a Delaware statutory trust that issues shares (“Shares”) representing fractional undivided beneficial interests in its net assets,” the filing said. “The assets of the Trust consist primarily of bitcoin held by a custodian on behalf of the Trust. The Trust seeks to reflect generally the performance of the price of bitcoin.”
The filing further states that “iShares Delaware Trust Sponsor LLC is the sponsor of the Trust; BlackRock Fund Advisors is the trustee of the Trust; Coinbase Custody Trust Company, LLC is the custodian for the Trust’s bitcoin holdings; and Bank of New York Mellon is the custodian for the Trust’s cash holdings and the administrator of the Trust.”
Kitco Crypto reached out to both BlackRock and Coinbase for more information, but both parties declined to comment on the matter.
It remains to be seen if the Securities and Exchange Commission’s recent lawsuit against Coinbase will have any material effect on this potential ETF project.
BlackRock previously partnered with Coinbase in August to launch a private trust offering US-based institutional clients exposure to spot Bitcoin (BTC) through Coinbase Prime Services.
Later in August, the firm launched another private trust that offers institutional clients in the U.S. direct exposure to Bitcoin. BlackRock was able to launch this trust without first obtaining approval from regulators since private investment trusts that do not solicit investments from retail investors are not required to register with authorities.
The asset manager also has previous experience in launching blockchain-related ETFs in the U.S. In April 2022, they launched the iShares Blockchain and Tech ETF, which tracks the investment results of an index composed of U.S. and non-U.S. companies that are involved in the development, innovation, and utilization of blockchain and crypto technologies.
On the international stage, the firm announced the launch of the iShares Blockchain Technology UCITS ETF in September, which is designed to track the NYSE FactSet Global Blockchain Technologies Capped index and offers exposure to blockchain and crypto companies for users in Europe.
Whether or not the company can get a Bitcoin-related ETF approved by the U.S. Securities and Exchange Commission (SEC) is a different matter, as the regulator has been stingy with approvals for such ETFs.
To date, the SEC has rejected more than a dozen spot Bitcoin ETFs, including those filed by SkyBridge, Grayscale, WisdomTree and ARK 21Shares. Bitcoin Futures ETFs have seen more success, with seven such ETFs currently approved by the SEC and available to trade in the U.S. market.
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| Grayscale slams SEC refusal to approve Bitcoin ETF as illogical, arbitrary, and discriminatory |
In May, Grayscale Investments, the world’s largest digital currency asset manager, took a different approach to a spot Bitcoin ETF by forming Grayscale Funds Trust. According to the registration statement, the fund will not invest in digital assets directly but may offer “indirect exposure to digital assets by virtue of its investments in companies and exchange-traded vehicles that use one or more digital assets as part of their business activities or that hold digital assets as investments.”
The fund will strive to invest at least 80% of its net assets “in the securities that comprise the Index and in investments that have economic characteristics that are substantially identical to the component securities of the Index,” Grayscale said.
To go along with the creation of Grayscale Funds Trust, the firm also filed a registration statement on Form N-1A with the Securities and Exchange Commission (SEC) for Grayscale Ethereum Futures ETF, Grayscale Global Bitcoin Composite ETF, and Grayscale Privacy ETF, each a series of Grayscale Funds Trust. The approval status of these funds is still pending.
