Key takeaways:
- Bitwise Asset Management filed a document requesting a regulation change to allow for its upcoming Bitcoin spot ETF.
- The iShares unit of fund management firm BlackRock (BLK) filed for establishing a spot Bitcoin ETF with the US SEC.
On June 16, Bitwise Asset Management filed a document requesting a regulation change to allow for its upcoming Bitcoin spot ETF.
A prior application for a Bitcoin spot ETF from Bitwise was denied by the US Securities and Exchange Commission (SEC) in June 2022. Although the SEC has not yet reviewed the application, which was published by the New York Stock Exchange (NYSE), it is unclear when it will be handled.
The SEC stated at the time that Bitwise’s ETF was unable to establish a sufficient surveillance-sharing system to offer protection against market manipulation and to demonstrate that the relevant market was of appreciable size.
However, the SEC noted that prospective future applications might satisfy these requirements, and Bitwise made an effort to demonstrate this in its most recent filing. Additionally, BitWise stated in the most recent filing that the SEC should make a decision regarding its proposed rule change within 45 to 90 days and either accept it or reject it.
The bitwise registration comes after the iShares unit of fund management firm BlackRock (BLK) filed to establish a spot Bitcoin ETF with the US SEC on June 15.
The filing states that the fund’s holdings will “consist primarily of bitcoin held by a custodian on behalf of the Trust,” going by the name “iShares Bitcoin Trust.” The filing stated that the custodian would be the cryptocurrency exchange Coinbase.
The largest US cryptocurrency exchange, Coinbase and BlackRock, which had $9.5 trillion in assets under management in the first quarter of 2023, are collaborating. The ETF will leverage Coinbase Custody and rely on spot market data from the exchange for pricing, with BNY Mellon serving as the cash custodian.
BlackRock previously inked a deal with Coinbase in August to make it possible for users of its Aladdin platform for investment management to own and trade in digital assets, starting with Bitcoin. Clients of BlackRock now have access to Coinbase’s trading, custody, prime brokerage, and reporting services as a result of the agreement.
It has been challenging to register a Bitcoin ETF with the SEC, especially for funds that operate in spot market trading. The SEC hasn’t yet authorized a single application for a spot ETF due to worries about possible fraud or manipulation in the spot market. In contrast, four Bitcoin ETFs have received SEC approval for futures trading.
