• Blackrock has filed an application with the SEC for a spot Bitcoin ETF.
• The iShares Bitcoin Trust would have properties similar to Grayscale’s Bitcoin Trust, but also has a redemption mechanism.
• This distinction could help BlackRock’s product get past the SEC’s market manipulation concerns.
BlackRock Applies For Spot Bitcoin ETF
BlackRock, one of the world’s largest asset management companies, has filed an application with the U.S. Securities and Exchange Commission (SEC) for the creation of the iShares Bitcoin Trust exchange traded fund (ETF).
Distinction From Grayscale Product
The proposed investment vehicle is technically a trust, but it differs from Grayscale’s existing trust product in that it includes a redemption mechanism that allows investors to buy and sell shares at any time. This feature makes it more similar to an ETF than Grayscale’s product, which does not include such a redemption feature and trades at a significant discount to its net asset value due to liquidity issues.
Possible Solution To Market Manipulation Concerns
The addition of this redemption feature may be enough to satisfy the SEC’s worries about market manipulation and other concerns that have prevented Grayscale from getting approval on their spot bitcoin ETF proposal thus far. With this in mind, BlackRock hopes that its application will be approved by regulators and its novel approach will allow them to offer investors access to bitcoin through an ETF-like vehicle.
Importance Of Understanding ETF Terminology
Experts say that this situation is a reminder of how complex exchange-traded fund terminology can be and how important it is for investors to understand these terms before investing in any new product or security type.
Overall, BlackRock’s application for a spot Bitcoin ETF provides an interesting solution for both institutional investors looking for access to bitcoin as well as regulators concerned about potential market manipulation. If successful, this new trust could open up new possibilities for cryptocurrency investments in the future.