• BlackRock, the world’s largest asset manager, filed to launch a Bitcoin Spot ETF with the SEC.
• The iShares Bitcoin Trust seeks to reflect generally the performance of the price of Bitcoin.
• The assets of the trust consist primarily of Bitcoin held by Coinbase Custodian.
BlackRock Files for Bitcoin Spot ETF
BlackRock, the world’s largest asset management giant, has filed with the Securities and Exchange Commission (SEC) to launch a Bitcoin Spot ETF on Thursday – a product yet to see life within the United States. The proposed fund is known as iShares Bitcoin Trust and it seeks to reflect generally the performance of the price of bitcoin.
Partnership With Coinbase
BlackRock plans to partner with Coinbase in order to provide custody for the Bitcoin backing its funds. This partnership follows an announcement from last year that Blackrock would offer its own cryptocurrency trading service.
ETF For Easy Investor Access
The filing stated that shares in this trust are meant to constitute a simple means of investing in Bitcoin rather than trading and holding it on a peer-to-peer basis. Other firms have spent years trying but have been denied by SEC, while multiple futures based ETFs have been approved as their underlying assets are surveilled by CME which can help detect market manipulation.
Difference Between Futures And Spot ETFs
Unlike futures based products, spot ETFs provide investors direct exposure to actual Bitcoins held in custody instead of derivative contracts whose prices are linked to those assets. This type of investment can be more attractive for investors who want more reliable underlying assets than derivatives provided by centralized exchanges and custodians like CME Group.
It remains uncertain whether Blackrock’s bid will be approved or not however if it does get approval it could set an example for other firms looking into launching their own spot ETFs in future thus providing easier access for retail investors into cryptocurrency markets without having direct involvement with crypto exchanges or peer-to-peer trading networks