In an unexpected turn of events during a stringent regulatory crackdown, one of the most prestigious financial institutions, BlackRock, applied for a Bitcoin exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission. Although technically a trust, experts argue that it is, in essence, an ETF. Senior ETF Analyst at Bloomberg, Eric Balchunas, dubbed it a “real deal” and highlighted BlackRock’s almost flawless record against the SEC—575-1, with nearly all of its ETF applications gaining approval.
Since 2013, several investment firms have applied for a Bitcoin ETF, only to be rejected by the top Wall Street regulator, citing market manipulation as a reason. Asset managers like VanEck, Ark Invest, and Bitwise suffered from these rejections, leading Grayscale Investments to initiate a lawsuit against the SEC after their Grayscale Bitcoin Trust (GBTC) didn’t get approval for conversion to an ETF.
BlackRock’s application, however, differs. It is submitted at an intriguing time when the SEC has been increasingly cracking down on the digital asset industry. The application comes from the world’s largest investment manager, wanting to work with Coinbase as a custodian, a company BlackRock previously worked with. Last week, the SEC sued the San Francisco-based exchange for allegedly offering and selling unregistered securities.
Balchunas expressed that BlackRock’s move has sparked new optimism in the Bitcoin ETF race, despite the absence of any indications that the SEC has changed its position. The application’s credibility comes from BlackRock’s weight as a serious institution, with the intention to involve the Bank of New York Mellon as the custodian for the Trust’s cash holdings.
On the debate surrounding BlackRock’s product being labeled an ETF or not, Balchunas insists it is inconsequential, pointing to the similarity between the product’s structure as a grantor trust and the GLD Gold Trust—commonly considered an ETF.
While the current regulatory climate might prove challenging, BlackRock’s impressive track record and influential status hint at its potential to finally bring Bitcoin to the forefront. The world eagerly watches to see if the Wall Street giant can accomplish what others could not.
Source: Decrypt
