The SEC has accepted an application for a Bitcoin exchange-traded fund (ETF) from BlackRock, following a similar application by Bitwise. This marks the beginning of the official review process for BlackRock’s ETF proposal, which holds great importance for the Bitcoin community. It is an important step for the Bitcoin community, showing the SEC’s willingness to explore the idea of a Bitcoin ETF.
An ETF is an investment fund that typically tracks specific indexes and is traded on exchanges. In the context of cryptocurrencies, a cryptocurrency ETF is a fund that mirrors the value of one or multiple digital tokens and includes a variety of cryptocurrencies.
On Friday, July 14, the SEC also announced that it is reviewing applications for other Bitcoin funds, such as the Wise Origin Bitcoin Trust, WisdomTree Bitcoin Trust, VanEck Bitcoin Trust, and Invesco Galaxy Bitcoin ETF. This demonstrates the recognition by these companies of the increasing demand for regulated Bitcoin investment options and their desire to meet the needs of their clients.
BlackRock’s involvement in the spot Bitcoin ETF race is significant due to its stature in the financial industry. The company’s filing for a Bitcoin ETF includes an agreement for “surveillance-sharing” with Coinbase, a cryptocurrency exchange. BlackRock’s decision to pursue a Bitcoin ETF highlights the growing acceptance and recognition of cryptocurrencies within the traditional financial sector.
The competition among companies vying for a Bitcoin ETF is positive, as it allows the SEC to assess different strategies and address concerns. It’s worth noting that spot Bitcoin ETFs have been denied in the US since 2017, but they are already available in Canada.
In a recent interview with CNBC, BlackRock CEO Larry Fink expressed optimism about the demand for cryptocurrencies among gold investors. He mentioned that more gold investors have shown interest in cryptocurrencies in the past five years, similar to the impact of exchange-traded funds (ETFs) on the gold market. Fink believes that a cryptocurrency product could serve as a hedge against fluctuations in the US dollar.
BlackRock recently filed an application for a spot Bitcoin ETF, which could be a determining factor in the SEC approving such a product. Fink highlighted the diversification benefits of cryptocurrencies and their potential to transcend any one currency. BlackRock’s objective is to create user-friendly and cost-effective investment products, aligning with their entry into the cryptocurrency market.
Fink has previously praised Bitcoin for its potential to revolutionize the financial industry. Brokerage firm Bernstein has said that there is increasing pressure on the SEC to approve a spot Bitcoin ETF, with the commission having already approved futures-based Bitcoin ETFs and leverage-based futures ETFs.