1. BITBILIHome
  2. Article

BlackRock’s application for Bitcoin ETF sparks clarification and potential breakthrough

• 32 views

TL;DR Breakdown

  • BlackRock’s iShares unit filed an application for the iShares Bitcoin Trust, raising questions about its classification as an ETF or a trust similar to GBTC.
  • The iShares Bitcoin Trust functions like an ETF, allowing redemptions, unlike GBTC. It can buy bitcoin to align with its trading price at the end of the day.
  • SEC approval is required, and the ongoing court battle with Grayscale may impact the decision. If approved, it would be the first Bitcoin ETF in the US, benefiting Coinbase as the custody and pricing provider.

Description

The recent filing by BlackRock’s iShares unit for creating the iShares Bitcoin Trust has caused some confusion among industry experts regarding the nature of the proposed product. The terminology surrounding Exchange Traded Funds (ETFs) can be complex, and BlackRock’s application has raised questions about whether it is an ETF or a trust similar to the … Read more

The recent filing by BlackRock’s iShares unit for creating the iShares Bitcoin Trust has caused some confusion among industry experts regarding the nature of the proposed product. The terminology surrounding Exchange Traded Funds (ETFs) can be complex, and BlackRock’s application has raised questions about whether it is an ETF or a trust similar to the Grayscale Bitcoin Trust (GBTC). In reality, it is both, highlighting the intricacies of ETF terminology. Noelle Acheson, the editor of Crypto is Macro Now, highlights the complexity of ETF terminology and clarifies that BlackRock’s proposal is technically for trust but one that allows redemptions, making it function similarly to an ETF.

While technically a trust, the iShares product functions similarly to an ETF as it allows for redemptions.

Contrary to the GBTC, which lacks a redemption mechanism, the iShares Bitcoin Trust offers the ability to redeem shares. This critical distinction is often overlooked, as the term “trust” may mislead market participants into assuming it operates like the GBTC. However, the iShares product aligns with an ETF structure, making it more dynamic and flexible. A significant advantage of an ETF over a trust is the ability to buy bitcoin at the end of the trading day, thereby aligning the fund’s assets with its trading price. In contrast, a trust lacks this mechanism, resulting in occasional discrepancies between its market price and underlying assets.

BlackRock’s strategy and regulatory hurdles

To address concerns of market manipulation, BlackRock’s application includes a surveillance-sharing agreement between exchanges. This agreement aims to mitigate potential risks and demonstrates the fund manager’s commitment to ensuring a secure and regulated environment for the ETF.

While BlackRock’s application marks a significant milestone in the pursuit of a Bitcoin ETF, regulatory approval from the U.S. Securities and Exchange Commission (SEC) is still required. The SEC has historically been cautious regarding spot-based ETF applications and has previously rejected Grayscale’s attempts to convert its GBTC into a spot bitcoin ETF.

The SEC’s concerns primarily revolve around the fragmented and unregulated nature of the spot market, which it considers less secure compared to the regulated futures market. The SEC has cited market manipulation as a key worry. However, the ongoing court battle between the SEC and Grayscale over its conversion plans may impact the SEC’s decision on BlackRock’s application.

If the iShares Bitcoin Trust receives regulatory approval, it would mark a significant milestone as the first Bitcoin ETF in the United States. The trust’s listing on the Nasdaq exchange and its daily pricing based on the CF CME Bitcoin Reference Rate further enhance its potential appeal to investors.

Approval of the iShares Bitcoin Trust would not only be a breakthrough for BlackRock but also a positive development for Coinbase, the chosen custody and market pricing provider for the ETF. Coinbase has faced recent challenges, including deposit outflows and a legal action from the SEC, which accused the company of operating an “unlawful exchange.” Regulatory approval for the iShares Bitcoin Trust could restore confidence in Coinbase and bolster its position in the cryptocurrency market.

In summary, BlackRock’s application for a Bitcoin ETF brings both clarity and potential breakthroughs in the ETF landscape. While addressing the complexities of ETF terminology, the iShares Bitcoin Trust’s functionality distinguishes it from the GBTC. However, regulatory approval remains a significant hurdle as the SEC evaluates the proposal in the context of the ongoing court battle with Grayscale. If approved, the iShares Bitcoin Trust could pave the way for increased mainstream adoption of cryptocurrency investments, benefitting both BlackRock and Coinbase in the process.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

文章来源于互联网:BlackRock’s application for Bitcoin ETF sparks clarification and potential breakthrough

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年6月20日 02:21
Next 2023年6月20日 03:23

Related articles

  • United States crypto startups flourish amid regulatory turmoil

    TL;DR Breakdown Reports suggest that United States crypto startups are flourishing despite the regulatory uncertainty in the crypto industry. Analysts call for clear regulatory oversight in the country. Description In the face of increased regulatory scrutiny in the United States, the crypto industry continues to demonstrate resilience and innovation. A recent report published by Galaxy Digital, a crypto investment firm, sheds light on the current state of the market and the capital investments flowing into crypto businesses. United States crypto firms experience a boom … Read more In the face of increased regulatory scrutiny in the United States, the crypto industry continues to demonstrate resilience and innovation. A recent report published by Galaxy Digital, a crypto investment firm, sheds light on the current state of the market and the capital investments flowing into crypto businesses. United States crypto firms experience a boom According to the report, despite the regulatory headwinds, nearly half of all capital investments are directed toward U.S.-based crypto startups. These firms attracted significant interest from venture capital (VC) firms, accounting for more than 43% of all deals…

    Article 2023年7月17日

  • Crypto rug pulls soar exceeding DeFi hacks: Reports

    TL;DR Breakdown A recent Beosin report has revealed that losses resulting from rug pulls and exit scams in the crypto market surpassed those from decentralized finance (DeFi) hacks in May. The most significant rug pull occurred when the Fintoch allegedly made off with $32 million on May 24. To combat these risks, Beosin recommends that crypto users enhance their anti-fraud awareness, conduct thorough due diligence before investing, and learn how to better secure their assets. A recent report from blockchain security firm Beosin has revealed that losses resulting from rug pulls and exit scams in the cryptocurrency market surpassed those from decentralized finance (DeFi) hacks in May. Six incidents of rug pull and scams amounted to over $45 million in total losses, while 10 attacks on DeFi protocols only netted $19.7 million. This decline in DeFi losses, nearly 80% lower than in April, had been observed for two consecutive months. The most significant rug pull occurred when the crypto project Fintoch allegedly made off with $32 million on May 24. The largest attack on DeFi platform last month was a…

    Article 2023年6月6日

  • U.S. House Rules committee sets meeting on debt ceiling deal

    TL;DR Breakdown The U.S. House Rules Committee is set to discuss the debt ceiling bill on Tuesday, aiming to prevent the U.S. Treasury from running short of money to cover its obligations by June 5. The proposed bill comes as a result of an agreement signed by Joe Biden and Kevin McCarthy to temporarily suspend the debt ceiling and cap some federal spending, aiming to avoid a U.S. debt default. Despite criticism from hardline Republicans and progressive Democrats, there is a broad expectation of support from both sides. In an effort to resolve an imminent financial impasse, the U.S. House Rules Committee is gearing up for a crucial meeting slated for Tuesday, May 30. The objective of this meeting revolves around discussing the prospective debt ceiling bill, a key piece of legislation aimed at staving off a potential U.S. default. This move comes on the back of an alarming notice from the U.S. Treasury, which has warned that its ability to cover all fiscal obligations would likely falter by June 5 without the passage of this critical bill through the…

    Article 2023年6月1日

  • Cryptocurrency Mystery Unveiled: Worldcoin’s App Migration Sheds Light on Optimism’s Safe Deployments

    TL;DR Breakdown Worldcoin, the developer behind the Tools for Humanity project, has confirmed that the recent surge of Safe deployments on the Optimism network was caused by their app migration. Initially shrouded in mystery, the unusual transactions sparked speculations of a potential Sybil attack or address farming. Description In a recent social media post, Tiago Sada, head of product for Worldcoin developer Tools for Humanity, confirmed that the surge in Safe deployments to the Optimism network was not an attack but rather a result of the app migration. The mysterious transactions had caused a stir on Twitter, with speculations ranging from a potential … Read more In a recent social media post, Tiago Sada, head of product for Worldcoin developer Tools for Humanity, confirmed that the surge in Safe deployments to the Optimism network was not an attack but rather a result of the app migration. The mysterious transactions had caused a stir on Twitter, with speculations ranging from a potential Sybil attack to address farming. However, Worldcoin’s clarification has put these concerns to rest, providing a sigh of relief…

    Article 2023年6月30日

  • How U.S. rising inflation could force the Fed’s hand

    TL;DR Breakdown U.S. inflation is expected to slow significantly, potentially causing the Federal Reserve to pause interest rate increases in June. The drop in inflation is driven by weaker energy prices, while core CPI remains high due to used car prices. The anticipated decrease in inflation and its impact on interest rate policy is being closely monitored globally. Eurozone and U.K. economies also face inflation-related challenges, prompting discussions on interest rate adjustments. The U.S. economic landscape is experiencing a shift as the anticipated decrease in inflation looms, with the possibility of prompting the Federal Reserve to halt its interest rate hikes. Set against a backdrop of only marginal easing in April, this downward inflation trend could create compelling grounds for the Federal Reserve to hit the pause button on interest rate increments come June. Shifting U.S. inflation trends The Bureau of Labor Statistics is predicted to deliver an encouraging report showing that inflation was 4.1% year-on-year in May, a considerable reduction from April’s 4.9% and the 5% observed in March. The expected decrease in the Consumer Price Index could add…

    Article 2023年6月14日
TOP