The BlackRocks Spot Bitcoin ETF Plan Seems to Be a Case of Perception Distorting Reality

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BlackRock rolls the dice on a bitcoin ETF

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BlackRocksBLK’s request to register a bitcoin ETF on the spot market looks as much like a self-fulfilling strategy as it does an attempt to gain approval for an investment format that has been repeatedly rejected by investors. US regulators.

The world’s largest fund manager, with $9.1 trillion in assets under management at the end of the first quarter, submitted a preliminary prospectus for iShares BitcoinBTC Trust late Thursday afternoon New York time. York. The exchange-traded fund (ETF) is intended to hold bitcoins that must be held by Coinbase, the largest US crypto exchange.

The Securities and Exchange Commission has insisted that spot bitcoin is not safe enough to be offered to retail investors, although funds based on bitcoin futures are permitted. In denying a request for VanEck to offer a bitcoin ETF in March, the agency said the Cboe division that applied for the fund’s listing failed to meet requirements that it must be designed to prevent acts and fraudulent and manipulative practices and to protect investors and the public interest. because the underlying spot bitcoin market is too opaque.

The SEC’s ongoing opposition to spot Bitcoin ETFs raises the question of why BlackRock would bother to file a prospectus for a fund that was to be disallowed. Perhaps the answer is that its traditional name, size and financial background would go a long way to overcoming agency opposition to an inevitable development.

As the world’s largest asset manager, BlackRock sees an opportunity to maintain its position in global financial markets through its ETF app, Jeff Feng, co-founder of SEI Labs and former Goldman Sachs analyst, told Forbes. If they are successful, it signals a strong sense of confidence in their leadership by the SEC to meet the challenges of a game-changing product alongside regulators while legitimizing bitcoin.

Feng, whose company backs the SEI blockchain, designed for trading digital assets, says the legitimacy could extend to other cryptocurrencies. Given that BlackRocks has changed its stance on bitcoin over the past few years, it’s clear that they don’t view bitcoin and tokenization as something that can be ignored as a globally traded asset.

BlackRock CEO Larry Fink called bitcoin a money laundering index in 2017, but has since tempered that view. In August, BlackRock announced that it would offer certain institutional clients bitcoin trading services under a deal that also involved Coinbase.

A spokeswoman for BlackRock confirmed the submission of the registration statement but declined to comment further due to regulatory filing restrictions.

The ETF filing comes as the SEC cracks down on the cryptocurrency industry. Last week he sued Binance, the world’s largest crypto exchange, as well as Coinbase, alleging they operated as unlicensed stock exchanges that listed unregistered securities, a category that includes most crypto. -currencies.

Digital Currencies Groups Grayscale is suing the SEC over its refusal to allow the fund management company to convert a bitcoin trust into an ETF in a case that began in June of last year. Grayscale argues that the SEC’s position that spot prices are subject to manipulation, but futures are not, is illogical, since the latter mirror the former.

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