BlackRock’s iShares unit has filed an application with the United States Securities and Exchange Commission (SEC) for the creation of a trust to issue a bitcoin exchange-traded fund (ETF).
According to him document presented this Thursday June 15, the trust will be called Shares Bitcoin Trustand will be in charge of issuing and custody of these ETFs, in case they are approved.
The filing by Blackrock’s iShares with the SEC does not seek approval for the issuance of a spot ETF, but the creation of a trust that would issue and control these ETFs. Although specialists on the subject, such as Eric Balchunas, Bloomberg economic analyst, considers that both an ETF trust and a spot ETF are “the same thing”.
Unlike a spot ETF, the iShares Bitcoin Trust will receive money from investors for their exposure to these ETFs. That is, the investor will not have direct exposure to the ETF, but through a third party (the trust).
The ETF that will own the trust, by regulation, must have a 1:1 convertibility ratio with the underlying asset, in this case, bitcoin (BTC). Given this type of structure, it is vitally important to have a reliable custody service that guarantees the safety of the assets. BlackRock has selected Coinbase Custodand for the protection of the BTC.
In the case of fiat money assets, they will be under the protection of the Bank of New York Mellon institution, the same bank that has launched custody services for bitcoin (BTC) and ether (ETH), as reported by CriptoNoticias.
An ETF, or Exchange-Traded Fund, is a type of mutual fund that is traded on an exchange and allows investors to gain exposure to an underlying asset without directly owning it. Although, in the case of iShare Bitcoin Trust, investors invest in the trust to access the ETF.
Analysts like Anthony Pompliano, they explained a possible misunderstanding that occurred about understanding that Blackrock would issue an ETF. The bitcoiner explained the differences between an ETF and a trust that have different regulatory implications. “The products are technically different, especially in terms of regulatory approvals, but the end result for investors is similar,” Pompliano said.
Some analysts comment that it could be a “master move” for a bitcoin spot ETF to finally be approved, since, in the trust application document, establishes a system that could mitigate market manipulation in bitcoin. “The SEC is very concerned about market manipulation related to bitcoin prices, and has cited this in almost, if not all, of the previous rejections,” said Greame Morre, director of the Polymesh Association.
Blackrock influences on the markets
This move by BlackRock’s iShares comes at a time as the cryptocurrency industry faces intense regulation in the United States, with the SEC taking legal action against major cryptocurrency exchanges like Coinbase and Binance. Despite this, the continued interest from financial institutions such as BlackRock demonstrates that bitcoin remains an asset of interest to the largest players in the industry.
BlackRock, as the asset management company biggest in the worldwith more than USD 10 trillion in assets under management, and its CEO, Larry Finkhave significant influence in the financial industry.