On Thursday (June 15, 2023), BlackRock officially filed for a spot Bitcoin ETF named iShares Bitcoin Trust despite the SEC rejecting numerous attempts by other companies in the past.
BlackRock is currently the largest asset manager in the world with over $9 trillion in assets under management, and BlackRock is the parent company of iShares.
Many of the ETFs that are used by robo advisors such as Syfe, Endowus and AutoWealth all belong to the iShares family, and iShares is the world’s largest exchange-traded fund (ETF) provider, with over $6 trillion in assets under management.
Spot Vs Futures Bitcoin
Currently, Bitcoin exchange-traded funds (ETFs) can only hold Bitcoin futures contracts or stocks of companies, and other ETFs with exposure to Bitcoin.
Below is a simple table with the differences between a Bitcoin spot ETF and a futures ETF.
The Security and Exchange Commission (SEC) continues to evaluate whether it will ultimately approve ETFs that own Bitcoin directly.
The question on everyone’s mind is whether iShares Bitcoin Trust be the first one to be approved.
Coinbase Named As Custodian In iShares Bitcoin Trust Filing
An interesting development found in this BlackRock filing is that the crypto exchange Coinbase was specified as the custodian of the fund’s bitcoin.
In early June 2023, SEC charged Coinbase for failing to register as a securities exchange, broker, and clearing house.
Coinbase defended against the allegations by saying that SEC did not provide it with clarity on how to be compliant, even though SEC approved its business model before it sold shares two years ago.
BlackRock Launched Private Bitcoin Trust In 2022
BlackRock has an existing private Bitcoin trust launched in 2022 that offers institutional clients in the United States with direct exposure to Bitcoin so it is no newbie to this game.
Then, BlackRock said in the announcement that “Bitcoin is the oldest, largest, and most liquid crypto asset, and is currently the primary subject of interest from our clients within the crypto asset space”.
BlackRock’s Record Of ETFs Approved Is 575-1
When it comes to filing for ETFs, BlackRock doesn’t play around as we can see from its record of getting ETFs approved is a whooping 575-1.
BlackRock only makes a move with the expectation that it will get approved.
This BlackRock filing is nothing like all the previous filings by other companies that were rejected by SEC.
BlackRock Brings In Nasdaq To Enter Surveillance-sharing Agreement
You see, BlackRock doesn’t file any application that it doesn’t feel confident in getting approved, as we can see from its records.
Sure, one can say that past records aren’t indicative of future results, but it does carry a lot of weight.
One such example is its willingness to propose answers to the reasons for the rejections of other spot Bitcoin ETFs.
In particular, BlackRock is proposing to bring in Nasdaq to mitigate against the risk of market manipulation.
Ending Thoughts on iShares Bitcoin Trust
BlackRock CEO Larry Fink is known to be openly skeptical about cryptocurrency in the past and we are gradually seeing changes in his position.
Perhaps the approval of iShares Bitcoin Trust will eventually pave the road to a win-win-win situation for BlackRock, the SEC and Coinbase.
When there is Yin, there is Yang.
When there is a Batman, there is a Joker.
When there is a Gary Gensler (SEC chairman), there is a Tom Emmer (House Majority Whip and crypto advocate).
As we can see from the explosive exchange below, there are far greater powers at work behind the scenes that we will never ever see.
To me, it is only a matter of time before traditional finance muscles its way into the crypto domain.
Maybe there is no better option than the largest asset manager to start the ball rolling with iShares Bitcoin Trust.
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Kevin started Turtle Investor when his net worth languished at negative $25,755. His desire to turn things around led him to build passive income from investments and side hustles that pay for his daily expenses and vacations. You can learn more about Kevin here.