BlackRock Files Application for Bitcoin ETF Amid Increasing Crypto Regulation

Investment firm BlackRock has partnered with crypto exchange Coinbase to apply for U.S. regulatory approval to launch a bitcoin spot exchange-traded fund (ETF). Recall that at present such a financial instrument is not available in the United States. The SEC has previously issued permits for ETFs that are based on bitcoin futures.

SEC has recently taken enforcement measures against prominent crypto exchanges, Binance and Coinbase, alleging their operation of unlicensed securities exchanges. Experts in the industry consider BlackRock’s move to be highly impactful for the U.S. crypto industry. The asset manager’s decision to pursue a bitcoin ETF in the midst of stricter regulations indicates that BlackRock has diligently assessed the situation and holds confidence in obtaining regulatory approval.

BlackRock representatives have yet to comment on the application. David Tawil, President and Co-founder at ProChain Capital, views the filing as a testament to institutional confidence in bitcoin and potentially positive for the wider crypto industry. Tawil emphasizes that pursuing a crypto ETF indicates a belief in the asset class’s longevity. Despite the SEC’s recent identification of other cryptocurrencies as securities, Chairman Gary Gensler has consistently categorized bitcoin as a commodity rather than a security. Peter Eberle, Chief Investment Officer at Castle Funds, suggests that BlackRock’s decision could have been influenced by the SEC’s actions, which he believes are actually beneficial for bitcoin.

As of Thursday, bitcoin was trading at approximately $25,625, experiencing a 2% increase over the past 24 hours. Despite a 60% decline from its all-time high in 2021, the leading cryptocurrency has achieved a 50% year-to-date gain.