BlackRock, the world’s largest asset manager, has filed an application with the US Securities and Exchange Commission (SEC) seeking approval for a Bitcoin exchange-traded fund (ETF). The proposed ETF would be called the BlackRock Bitcoin Trust and would trade on the New York Stock Exchange (NYSE) under the ticker symbol “BTC.”
The application states that the ETF would invest in Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME) and other regulated futures exchanges. The ETF would not invest directly in Bitcoin, but rather in cash-settled futures contracts that track the price of Bitcoin.
BlackRock has chosen Coinbase, one of the largest cryptocurrency exchanges in the world, as the custodian for the Bitcoin held by the ETF. Coinbase would be responsible for storing the Bitcoin and ensuring its safekeeping.
The proposed ETF is not BlackRock’s first foray into the world of cryptocurrencies. The company has previously invested in blockchain technology and has explored the potential of cryptocurrencies as an asset class.
If approved, the BlackRock Bitcoin Trust would be the first Bitcoin ETF to trade on a major US exchange. Several other companies have attempted to launch Bitcoin ETFs in the past, but all have been rejected by the SEC due to concerns about market manipulation and investor protection.
The SEC has been hesitant to approve Bitcoin ETFs due to concerns about the volatility and lack of regulation in the cryptocurrency market. However, some experts believe that the approval of a Bitcoin ETF could bring more institutional investors into the market and help to stabilize prices.
The approval process for the BlackRock Bitcoin Trust could take several months or even years. The SEC will review the application and may request additional information or clarification before making a decision.
In the meantime, investors who want exposure to Bitcoin can invest in Grayscale’s Bitcoin Trust, which trades on over-the-counter markets. However, this investment vehicle is only available to accredited investors and has a high management fee.
Overall, the proposed BlackRock Bitcoin Trust represents a significant step towards mainstream adoption of cryptocurrencies. If approved, it could pave the way for more institutional investors to enter the market and help to legitimize Bitcoin as an asset class.
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- Source: Plato Data Intelligence.