The push for regulatory approval of cryptocurrency investment products continues as prominent asset managers, including BlackRock, WisdomTree, and Invesco, have recently submitted applications to the U.S. Securities and Exchange Commission (SEC) seeking permission to launch a spot bitcoin exchange-traded fund (ETF). This move comes despite the SEC's cautious stance towards the crypto market, as evidenced by its recent lawsuits against Coinbase and Binance for operating as unregistered securities trading venues. The SEC maintains that digital assets should be subject to the same regulations as traditional securities.
Potential Approval and Market Impact
Speculation surrounding the license applications has led to increased anticipation that the SEC might approve its first-ever crypto ETF. The news of these applications has already sparked a rise in the price of bitcoin, which surged from under $25,000 to over $26,000 immediately after BlackRock's application. In fact, bitcoin has now surpassed $30,000, reaching this milestone for the first time since April and only the second time in 2023.
While this is not the first time asset managers have sought SEC approval for a spot bitcoin ETF, previous attempts have faced rejection due to concerns over fraud and market manipulation. WisdomTree, for instance, had its application rejected twice in December 2021 and October 2022. To address these concerns, BlackRock has entered into a surveillance sharing agreement with the Chicago Mercantile Exchange futures markets, while WisdomTree has expressed willingness to establish a similar agreement with a US-based spot trading platform for Bitcoin.
BlackRock's Bitcoin ETF Filing
BlackRock, the world's largest asset manager, has recently filed for its own bitcoin ETF called iShares Bitcoin Trust. The filing revealed that the ETF would rely on Coinbase Custody as its custodian. It's worth noting that the SEC has yet to approve any applications for spot bitcoin ETFs, and last year, BlackRock launched a spot bitcoin private trust exclusively for institutional clients in the United States.
The asset management industry's interest in crypto ETFs reflects the growing need for regulated investment products in the cryptocurrency market. The SEC's ongoing scrutiny and legal actions against major exchanges like Coinbase and Binance have increased the urgency for establishing a clear regulatory framework. The potential approval of a spot bitcoin ETF by BlackRock, a highly respected and established asset management company, could be seen as a positive step in the journey towards regulatory acceptance of crypto assets.
Conclusion
The recent applications for spot bitcoin ETFs by major asset managers demonstrate the industry's persistence in seeking regulatory approval and recognition. While the SEC has yet to approve such products, the growing interest from reputable institutions and the potential market impact suggest that the path towards crypto ETFs is evolving. As the regulatory landscape continues to evolve, the industry eagerly awaits the SEC's decision, which could have significant implications for the future of cryptocurrency investments.
