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The U.S. Securities and Exchange Commission (SEC) has received official papers from BlackRock’s iShares division asking for approval for a spot bitcoin (BTC) exchange-traded fund (ETF). The iShares Bitcoin Trust, the proposed ETF, will mostly be made up of bitcoin held by Coinbase, a well-known cryptocurrency exchange serving as the custodian. This action by BlackRock shows the company’s interest in embracing Bitcoin’s potential and is an important step forward in the acceptance of cryptocurrencies by the general public.
BlackRock is currently the largest asset manager in the world with more than $10 trillion in assets under management (AUM). This powerful position may provide the corporation an edge when interacting with regulatory authorities like the SEC, especially when combined with CEO Larry Fink’s political clout. The SEC has previously denied bids by other fund management companies, including Grayscale, VanEck, and WisdomTree, to establish spot bitcoin ETFs. BlackRock’s size and power, however, might create a distinct situation, making it more difficult for the SEC to reject their proposal.
According to Sui Chung, CEO of CF Benchmarks, a division of reputed crypto exchange Kraken, the planned iShares Bitcoin Trust ETF will be benchmarked against the CME CF Bitcoin Reference Rate. He underlined that, “The proposed ETF is benchmarked against the CME CF Bitcoin Reference Rate. CF Benchmarks takes price data exclusively from cryptocurrency exchanges that adhere to the highest possible standards of market integrity and transparency. This protects investors as products benchmarked against it can then consistently and reliably track the spot price of the underlying asset.”
The iShares division of BlackRock has filed for a spot bitcoin ETF at a time when the US cryptocurrency market is facing heightened regulatory scrutiny. Notably, the SEC has filed a lawsuit against prominent cryptocurrency exchanges including Coinbase and Binance. The news of BlackRock’s engagement in the Bitcoin ETF market, however, seems to have given the market a little boost. Following the news, there was a slight gain in the price of bitcoin, which brought it up to slightly about $25,600.
BlackRock’s intention to explore a bitcoin ETF supports the idea that some of the biggest financial firms in the world are still interested in Bitcoin. The participation of such a well-known figure in traditional finance gives the bitcoin market more validity and credibility. BlackRock’s addition to the expanding number of organizations investigating Bitcoin’s potential denotes a wider acceptance of digital assets within traditional finance.