Some companies that had already withdrawn from their ETF have re-applied the request.
The approval of a Bitcoin spot ETF could bring institutional investment to the cryptocurrency.
BlackRock, the largest mutual fund on the planet, has fueled interest in creating the first Bitcoin exchange-traded fund (ETF) in spot format.
After the proposal presented last week by the firm, other four companies —Invesco, WisdomTree, Valkyrie and Bitwise— have formally submitted their registration to the Securities and Exchange Commission (SEC) for the creation of a bitcoin ETF.
Three of these companies filed the S-1 securities registration form with the SEC, while two requested a re-application of the application. The next step is an exhaustive review by the Commission on the structure of the contract and its operation, for its subsequent approval or rejection.
Companies like Invesco and Bitwise, during 2021, they performed repetitive applications for approval of an ETF. However, all were ignored by the Commission. Therefore, the situation with BlackRock seems to reinvigorate the discussion.
According to the chronology of eventsthe first request was sent by BlackRock on June 15according to confirm the SEC website. The WisdomTree firm sent its request on July 20, while in the case of Valkyrie it confirmed it for July 21.
Now, in the case of Bitwise and Invesco, they submitted a renewal application (form 19b-4). This is because both firms had submitted ETF proposals in 2021. Bitwise sent the request on July 16, while Invesco formalized on June 20.
In total, there are five companies, up to the time of publication of this note, that have formally requested the issuance of a Bitcoin spot ETF before the SEC and are awaiting a response.
BlackRock changed the rules of the game
One of the most marked differences from previous ETF applicationsis that BlackRock will create a trust for the issuance and custody of the ETFs. This means that investors will not have direct exposure to the ETF, but to the trust.
A trust is a legal structure used for the investment and management of securities, as well as other financial assets (including cryptocurrencies). This is an entity that is created to act as trustee or custodian of investors’ assets, in this context, on the ETFs issued.
The SEC has alleged that Bitcoin spot ETFs are prone to market manipulation, which would be the main limitation so that they are not approved by the commission. That is why BlackRock decided to apply this financial figure, which would allow investors to be covered.
The WisdomTree firm also applied the same BlackRock strategy, requesting the creation of a trust for the issuance and custody of the ETFs. For the rest of the requests, until now, the traditional structure is maintained, in which investors have direct exposure against the ETF.
More companies could join
Although, at the moment, there are only five companies that have filed their application with the SEC, it is rumored that other companies could join this “wave” of applications.
One of the companies that has made the most noise these days has been Fidelity, the third largest investment firm in the world. According to some sources, Fidelity is expected to partner with Grayscale to launch an ETF together, or they could launch the application individually. It should be remembered that Fidelity also applied in 2021 for an ETF, which was rejected.