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(Kitco News) - BlackRock’s spot Bitcoin exchange-traded fund (ETF) filing has initiated a new wave of institutional interest in digital assets as both WisdomTree and Invesco have since re-filed paperwork for their own Bitcoin ETFs after they were initially rejected by the Securities and Exchange Commission (SEC).
On Tuesday, Invesco submitted its paperwork for its “Invesco Galaxy Bitcoin ETF” with the SEC, arguing that the lack of a spot BTC ETF in the US puts investors at considerable risk as it can lead to the utilization of “riskier means” to access cryptocurrencies. This includes the use of platforms like FTX, Celsius, BlockFi and Voyager, which have all filed for bankruptcy.
“If a Spot Bitcoin ETP was available, it is likely that at least a portion of the billions of dollars tied up in those proceedings would still reside in the brokerage accounts of U.S. investors, having instead been invested in a transparent, regulated, and well-understood structure – a Spot Bitcoin ETP,” Invesco added. “To this point, approval of a Spot Bitcoin ETP would represent a major win for the protection of U.S. investors in the cryptoasset space.”
Invesco previously attempted to get a Bitcoin ETF approved through its partnership with Galaxy in 2021 but abandoned those plans several months later after it became clear that the SEC would not be approving it.
WisdomTree filed its paperwork for the “WisdomTree Bitcoin Trust” on Tuesday, saying that “the bitcoin market has matured such that it is operating at a level of efficiency and scale similar in material respects to established global equity, fixed income and commodity markets.”
The investment objective of the new Trust is “to gain exposure to the price of bitcoin, less expenses and liabilities of the Trust’s operations.”
To achieve this objective, the Trust “will hold bitcoin and will value its Shares daily based on the CF Bitcoin US Settlement Price (the “Reference Rate”), which is an independently calculated value based on an aggregation of executed trade flow of major bitcoin spot exchanges.”
WisdomTree said the Trust will not purchase or sell Bitcoin directly. When the Trust sells or redeems its shares, “it will do so in “in-kind” transactions in blocks of 50,000 Shares (a “Basket”) based on the quantity of bitcoin attributable to each Share of the Trust.”
From there, financial firms that are authorized to purchase or redeem shares with the Trust will “deliver, or facilitate the delivery of, Bitcoin to the Trust’s account with the Cusdocian in exchange for Shares when they purchase Shares, and the Trust, through the Custodian, will deliver bitcoin to such Authorized Participants when they redeem Shares with the Trust.”
The SEC previously rejected WisdomTree’s spot Bitcoin ETF applications in Dec. 2021 and Oct. 2022. Thus far, the regulator has only approved applications for Bitcoin Futures ETFs due to their use of data provided by the Chicago Mercantile Exchange (CME). Both the WisdomTree and Invesco Bitcoin ETFs have applied to be listed on the Cboe BZX Exchange.
In its denials, the regulator has cited several issues, such as funds not being “designed to prevent fraudulent and manipulative acts” or to “protect investors and the public interest.”
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| Grayscale forms new trust to pursue spot Bitcoin ETF in the U.S. |
Bitwise Asset Management, the world’s largest crypto index fund manager, also re-filed the paperwork for its Bitwise Bitcoin ETP Trust on Friday. The firm originally filed for the spot BTC ETF in Oct. 2021 but had its application rejected by the SEC in June 2022.
Bitwise CEO Matt Hougan said that BlackRock’s filing can be seen as the start of the mainstream era for crypto, and tweeted, “The future of crypto is more BlackRock and less Binance."
As a result of the sudden flurry of Bitcoin ETFs from firms that are influential in the financial industry, the price of BTC rallied back above $30,000 on Wednesday, its highest price since April 26, with bulls now looking to extend the gains and push BTC to its highest price in 2023.
BTC/USD Chart by TradingView
