BlackRock Files for Spot BTC ETF
BlackRock, the world’s largest asset manager, garnered headlines recently when it filed for a spot Bitcoin (BTC) exchange-traded fund (ETF). BlackRock’s BTC ETF would allow consumers to invest in the world’s most popular cryptocurrency without taking custody of the digital assets themselves and taking on the risks associated with self-custody and custodial exchanges such as Coinbase and Binance.
However, BlackRock listed Coinbase Custody as its custodian despite the cryptocurrency exchange’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). The SEC previously rejected Grayscale Investment’s application to convert its Grayscale BTC Trust into a spot ETF, and has also rejected similar proposals for BTC-based ETF’s from Fidelity, Cboe Global Markets, NYDIG, and others.
While BlackRock’s potential BTC ETF promises to drive further investment and interest in the iconic cryptocurrency, consumers should be mindful that as with all ETF’s, their potential investment would not grant them custody or ownership rights in the underlying assets. Although traditional financial institutions such as banks and hedge funds have previously expressed skepticism concerning the value and practicality of cryptocurrencies, BlackRock’s Bitcoin ETF perhaps signals a definitive shift in the industry’s approach. With two of the world’s leading cryptocurrency exchange’s U.S. subsidiaries embroiled in a legal battle with the SEC, some have speculated that BlackRock’s BTC ETF signals it believes Coinbase will prevail or at least emerge relatively unscathed from the SEC’s recent lawsuit.
SEC Approves First Leveraged BTC Futures ETF
On June 23, nearly a week after BlackRock and other traditional financial institutions began seeking approval for spot Bitcoin exchange-traded funds (ETF), the U.S. Securities and Exchange Commission (SEC) approved the first leveraged Bitcoin (BTC) Futures ETF. Volatility Shares’ leveraged BTC future ETF is scheduled to launch on the Chicago Board Options BZX Exchange on June 27.
This news comes on the heels of BlackRock’s announcement on June 15 that it filed for a Spot BTC ETF. The SEC’s approval of the new leveraged BTC ETF has generated significant discourse in the crypto community as consumers wonder if this move signals a shift in the agency’s approach to digital assets, and question why this decidedly riskier investment vehicle was approved ahead of BTC spot ETFs.
However, even as some traditional financial institutions such as BlackRock appear poised to embrace the digital assets industry, consumers should continue to exercise caution when investing in such assets and founding companies in the space. Courts and regulators have thus far not hesitated in applying existing laws to other classes of digital assets such as NFTs, and the regulatory status of even the most prominent cryptocurrencies such as BTC and Ethereum is still subject to change. In the face of such regulatory uncertainty, you may be asking yourself, “Do I need a crypto lawyer?”
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