BlackRock Joins Race to $100k: Files Application for Bitcoin ETF

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Summary:

  • BlackRock, a trillion-dollar company, has applied for a Bitcoin spot exchange-traded fund in the US.
  • Coinbase Custody Trust Company and Bank of New York Mellon will hold the Bitcoin and fiat funds respectively.
  • SEC has not approved any of the applications yet, including Grayscale’s which is now being challenged in court.

Breaking News: BlackRock Embraces Bitcoin

Trillion-dollar company BlackRock has recently filed an application to become the first crypto spot Exchange Traded Fund (ETF) in the United States. This follows similar applications from companies like Ark Investment and Grayscale. The filing with the U.S. Securities and Exchange Commission revealed that Coinbase Custody Trust Company would take custody of the Bitcoin holdings while Bank of New York Mellon would be responsible for its fiat funds. The Shares have been designed to remove any obstacles related to direct investment in Bitcoin.

Can BlackRock Drive BTC Price to $100,000?

The odds are currently against BlackRock as SEC has rejected all previous applications for a spot Bitcoin ETF from other companies including Grayscale’s which is now being challenged in court by them. However, SEC had relied on underlying futures market approvals to approve trust shares before; this means that approval could come if there is a regulated market of significant size for spot bitcoin trading.

Coinbase Accused by SEC

One interesting point about this filing is that Coinbase, who will take custody of the Bitcoin holdings, is currently flagged by SEC as a non-compliant company which may reduce their chances of approval further although it may not be enough reason for rejection given other factors like having a regulated market of significant size for spot bitcoin trading can still earn them approval for their application .

Grayscale Takes Court Action Against SEC

Grayscale responded to rejections by taking SEC to court at the District of Columbia Circuit Court of Appeals claiming that their order was not in line with their approvals given previously. The former solicitor general Donald Verrilli Jr who represented Grayscale argued his case but no verdict has been given yet on whether or not they will get approval or rejection from SEC this time around.

Conclusion
It remains uncertain whether or not Blackrock’s application will be approved or rejected just like all other applications made so far but one thing stands – it will be an interesting case study when verdict is eventually reached regarding these filings especially that coming from Grayscale’s challenge against SEC’s order at the District of Columbia Circuit Court of Appeals