BlackRock, the world’s largest asset manager, has filed an application for a spot bitcoin exchange-traded fund.
There are currently no such products in the U.S. The SEC approved several bitcoin
BTCUSD,
futures-based ETFs in the past, but has yet to greenlight anything that is backed by bitcoin itself.
BlackRock
BLK,
will tap Coinbase Global Inc.
COIN,
to provide custody for the ETF, according to a filing with the U.S. Securities and Exchange Commission on Thursday.
BlackRock filed the application as regulators are increasing their oversight of the crypto industry. The SEC recently sued crypto exchanges Binance and Coinbase, charging they operated unlicensed securities exchanges.
The move is especially impactful for the U.S. crypto industry now, participants said.
If an asset manager as big as BlackRock is making such a move at a time when crypto regulation is being tightened, “they probably have done sufficient due diligence to know there is a decent chance for the ETF to get approved by the regulators,” according to Matt Zhang, founder and managing partner at Hivemind.
A representative at BlackRock didn’t return requests seeking comment.
In the current regulatory environment, BlackRock’s filing for a bitcoin ETF “says a lot about institutional confidence in at least bitcoin,” according to David Tawil, president and co-founder at ProChain Capital.
It also may bode well for the whole crypto industry, Tawil said. “You’d only apply for a crypto ETF if you believe in the longevity of the asset class,” Tawil said in a phone interview.
While the SEC named several cryptocurrencies, such as BNB, Solana
SOLUSD,
Cardano
ADAUSD,
and Polygon
MATICUSD,
as securities in the lawsuits against Binance and Coinbase, Chairman Gary Gensler has repeatedly said that bitcoin was the only cryptocurrency he was prepared to publicly label a commodity, rather than a security.
The SEC’s recent actions are “actually not bad for bitcoin,” said Peter Eberle, chief investment officer at Castle Funds. “Perhaps BlackRock saw that and has decided that they want to make a move in that direction,” noted Eberle in a call.
Bitcoin was trading at around $25,625 on Thursday, up 2% over the past 24 hours, according to CoinDesk data. The largest cryptocurrency has gained 50% year to date, but is still down over 60% from its record high in 2021.
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