- July 18, 2023
- Posted by: [email protected]
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The United States Securities and Exchange Commission (SEC) has taken a significant step in the regulatory process by accepting BlackRock’s application for a spot Bitcoin exchange-traded fund (ETF). This move comes after the SEC’s acknowledgment of a similar application submitted by Bitwise just the day before, marking the beginning of the official review process for BlackRock’s ETF proposal. While it is an initial step that sets the stage for a lengthy regulatory journey, it signifies the SEC’s openness to exploring the concept of a spot Bitcoin ETF and evaluating its potential impact on the market.
ETFs are investment funds commonly traded on exchanges that typically track specific indexes. In the realm of cryptocurrencies, a cryptocurrency ETF is a fund that mirrors the value of one or multiple digital tokens and includes a diverse range of cryptocurrencies.
In addition to BlackRock, the SEC has announced its review of applications for various funds, including Wise Origin Bitcoin Trust, WisdomTree, VanEck, and Invesco Galaxy, indicating the increasing interest and competition in the spot Bitcoin ETF race.
BlackRock’s entry into this race holds substantial significance due to its prominent position in the financial industry. Its filing for a spot Bitcoin ETF included an agreement for “surveillance-sharing” with Coinbase, a leading cryptocurrency exchange. This partnership aims to address concerns related to market manipulation and ensure the integrity of the ETF.
The competition among companies seeking to launch a Bitcoin ETF in the United States is widely regarded as a positive development for the crypto industry. Multiple filings increase the chances of success, and diverse proposals enable the SEC to evaluate different strategies and address various concerns.
Although the SEC has yet to approve a spot Bitcoin ETF in the United States, such financial products are already available in Canada. Regulators in Canada have approved three significant funds: Purpose Bitcoin, 3iQ CoinShares, and CI Galaxy Bitcoin. These approvals demonstrate the potential for success in launching similar products in the United States.
The SEC’s acceptance of BlackRock’s application represents a crucial step forward in the regulatory evaluation of spot Bitcoin ETFs. It signals the SEC’s willingness to explore this investment vehicle and assess its potential impact on the market. As the review process unfolds, market participants and crypto enthusiasts eagerly await the SEC’s decision, which could pave the way for the introduction of a spot Bitcoin ETF in the United States, aligning it with its Canadian counterparts.
