BlackRock Inc, the world's largest asset manager, filed an application with the US Securities and Exchange Commission (SEC) last night to launch a spot Bitcoin (BTC) exchange-traded fund (ETF) under its subsidiary iShares.
The proposed fund, called iShares Bitcoin Trust, will track the CME CF Bitcoin Reference Rate and keep physical Bitcoins under the custody of the largest US crypto exchange, Coinbase. If approved, the fund will be traded on the Nasdaq.
Thiccy's analysis on Twitter examines the nuances and lackluster performances of Bitcoin futures ETFs, raising questions about the potential adoption of the BlackRock spot ETF.
Thiccy believes that while the SEC has given the green light to several Bitcoin futures ETFs, these offerings, which hold recent Bitcoin futures contracts on the CME, have not gained popularity. “These are currently traded on US Equity markets, but have very few 'managed assets',” says Ticcy.
According to Thiccy, Bitcoin futures ETFs often market themselves as "strategy" ETFs due to the long-term disadvantages of holding futures contracts instead of spot Bitcoins. According to the analyst, individual investors find it more sensible to hold spot Bitcoin directly rather than deal with these ETFs for a long time.
"SEC Accepts 575 of BlackRock's 576 ETF Applications"
However, Thiccy claims that a spot ETF backed by physical Bitcoin rather than futures contracts could be game-changer.
Evaluating BlackRock's application, Thiccy believes the outcome remains uncertain. But Thiccy notes the importance of BlackRock's position as the largest and most respected asset manager, which could facilitate a special relationship with the SEC. Moreover, the growing pressure of the Republican Party over SEC Chairman Gary Gensler and the perception of arbitrary decision-making further complicate the situation.
In addition, according to the data, the SEC approval rate of BlackRock's ETF applications stands out as 575 acceptances and 1 rejection.
Thiccy concludes by stating that the SEC approval of a spot ETF would be a huge boost for the crypto market. But time will tell whether BlackRock's request will break through legal hurdles and usher in a new era for cryptocurrency investment options.
*Not investment advice.