BlackRock Close to Filing an Application for a Bitcoin ETF: CoinDesk

The world’s largest asset manager is close to filing an application for a bitcoin exchange-traded fund, according to CoinDesk. 

BlackRock will use Coinbase (COIN) Custody for the ETF as well as Coinbase’s spot market data for pricing, a source told CoinDesk. 

It is not clear if the ETF will be one based on the spot or futures market — Blackrock did not respond to a request for comment from cryptonews. 

As of Thursday morning, the price of bitcoin stayed close to $25,000 down from close to $26,000 on Wednesday, according to CoinMarketCap.

The SEC’s history with bitcoin ETFs

The US Securities and Exchange Commission has never approved of a spot bitcoin ETF, citing concerns over fraud and manipulation in previous rejections. 

Rejections also go as far back to July 2016 when the SEC disapproved of a proposal from Cameron and Tyler Winklevoss to list and trade shares of the Winklevoss bitcoin trust. 

The agency, however, did approve of several bitcoin futures ETFs when it first allowed the trading of the ProShares Bitcoin Strategy ETF in October 2021. 

Grayscale versus SEC

Grayscale, the world’s largest digital asset manager, is trying to convert one of its funds, GBTC, into a spot bitcoin ETF, which was rejected by the SEC last year. 

The company then swiftly filed a lawsuit over the decision, which is currently playing out in a Washington DC court with a final decision expected later this year. 

Grayscale has argued that the spot price of bitcoin in both spot and futures ETFs is subject to the same risks, and so it does not make sense to approve one product and not the other.

The SEC has said that its disapproval of Grayscale’s spot ETF “was reasonable, reasonably explained, supported by substantial evidence, and faithful to the text of the Exchange Act.”

The agency said spot bitcoin ETFs and bitcoin futures ETFs were different given that the spot market is “fragmented and unregulated” compared to futures which trade on the Chicago Mercantile Exchange, which is regulated.