BlackRock files for spot bitcoin ETFs, with Coinbase as cryptocurrency custodian

Asset management giant Black stone The first steps were taken Thursday to launch a bitcoin spot fund, which has long been a point of contention between cryptocurrency advocates and federal regulators.

The company has filed an application with the Securities and Exchange Commission to launch the iShares Bitcoin Trust. If approved, the ETF would allow investors easy access to cryptocurrency exposure in a product from one of Wall Street’s largest companies.

“Stocks are meant to be a simple way to make an investment similar to investing in Bitcoin rather than directly acquiring, holding and trading Bitcoin on a peer-to-peer or other basis or via a digital asset exchange.” Filing said.

The SEC has so far resisted allowing the launch of an instant bitcoin ETF in the US. The regulator is currently in a legal battle with Grayscale over whether to allow the company to convert the Grayscale Bitcoin Trust into an ETF. A decision in this case is expected later this year.

Several other companies have placed and subsequently withdrawn applications to launch instant Bitcoin funds. If the SEC backs down, there could be a flood of these products on the market.

It usually takes months for ETFs to launch after the initial deposit, if they start trading. The proposed BlackRock fund is likely to meet stiff resistance from the SEC, and the deposit could be withdrawn before the ETF is ever launched, said Aisha Hunt, a principal at the law firm Kelly Hunt & Charles Asset Management.

BlackRock’s move comes at a time when cryptocurrency prices remain well below all-time highs and the industry faces increasing scrutiny in Washington, DC.

The Securities and Exchange Commission (SEC) recently sued Coinbase and Binance for allegedly operating unregistered securities exchanges. The US Securities and Exchange Commission has also accused Binance of combining customer funds with its own funds.

Coinbase is listed as the bitcoin custodian for the proposed BlackRock ETF. BlackRock has an extension Existing strategic partnership with Coinbase. The companies announced last year that Aladdin, BlackRock’s institutional investment platform, would be connected to Coinbase Prime for cryptocurrency trading and custody.

The SEC did not immediately respond to CNBC’s request for comment on the new filing.

BlackRock’s entry into the bitcoin ETF space could be a huge boost for a sector that has had a rocky start over the past couple of years.

Bitcoin futures ETFs were first launched in 2021, however ProShares Bitcoin Strategy ETF (BITO) It is the only company that has grown to a significant size, with assets of about $800 million. According to FactSet, the fund has lost more than 40% on a total return basis since its launch. price bitcoin It hit an all-time high shortly after BITO was launched, and is down more than 60% since its peak.

BlackRock already owns a cryptocurrency-related equity fund — the iShares Blockchain and Tech ETF (IBLC) — but that fund has less than $10 million in assets more than a year after its launch.