BlackRock, the asset management company with a staggering $9 trillion under its control, is said to be on the verge of applying to a bitcoin exchange-traded fund (ETF).
Insider sources have revealed that progress is being made in preparing the application.
Working alongside a trusted custodian
According to reports, the New York City-based investment giant is planning to partner with Coinbase Custody, a leading cryptocurrency storage and management platform.
This collaboration is expected to provide the necessary infrastructure and security for the potential bitcoin ETF. Moreover, BlackRock intends to leverage Coinbase Custody’s technology to ensure the integrity of the digital assets held within the ETF.
Furthermore, to ensure accurate and reliable pricing for the ETF, BlackRock plans to incorporate data from Coinbase’s spot market.
The SEC’s stance on ETFs
The U.S. Securities and Exchange Commission (SEC) has consistently withheld its approval for a spot bitcoin exchange-traded fund (ETF), primarily due to apprehensions surrounding fraudulent activities and market manipulation. This ongoing skepticism has resulted in a series of rejections over the years.
The SEC’s reservations regarding Bitcoin ETFs date back to July 2016, when it did not approve a proposal put forth by Cameron and Tyler Winklevoss. The proposal sought to list and trade shares of the Winklevoss Bitcoin Trust.
However, the regulatory agency expressed concerns about the lack of robust investor protections and the potential for price manipulation in the nascent cryptocurrency market. Since then several other firms have also filed, or revived previous applications, including ARK Investment and 21Shares in late April.
Since then, the SEC has remained cautious and hesitant to approve any spot bitcoin ETF applications.
The agency has consistently highlighted the need for comprehensive safeguards against fraud and manipulation before considering such proposals. This has only been amplified due to the SEC’s ongoing lawsuit against Binance and Coinbase, in which securities classification has spurred an ongoing crypto crackdown.