BlackRock’s ETF filing has sparked a new wave of optimism, with more asset managers following suit.
Last week, BlackRock, the world’s largest asset manager, filed for a Bitcoin spot exchange-traded fund (ETF) on Nasdaq. The filing sparked huge excitement and optimism among investors, leading other investment firms to follow suit.
A June 21 filing shows that WisdomTree requested permission from the US Securities and Exchange Commission (SEC) to list its Bitcoin ETF, the “WisdomTree Bitcoin Trust”, on the Cboe BZX Exchange.
The company manages $83 billion in assets, and it’s not entirely new to the ETF race. WisdomTree has already faced two rejections from the SEC regarding a Bitcoin ETF, most recently in October 2022.
A few hours later, Balchunas, who is a Senior ETF analyst for Bloomberg, tweeted that global asset manager Invesco also reapplied for its Bitcoin ETF (“Invesco Galaxy Bitcoin ETF“) to be listed on the Cboe BZX exchange.
“By using professional custodians and other service providers,” the filing states, “the Trust provides investors interested in exposure to bitcoin with important protections that are not always available to investors that invest directly in Bitcoin, including protection against insolvency, cyber attacks, and other risks.”
Invesco claims that if US investors had access to a regulated Bitcoin ETF, instead of “directing their bitcoin investments into loosely regulated offshore vehicles” (i.e. FTX), countless Bitcoin investors would have been protected from historic bankruptcy proceedings and other insolvencies.
It’s unclear whether any of these applications will be approved. The past few months have shown that the SEC is notoriously hostile to the crypto industry, and it has rejected every Bitcoin ETF application to date. In the case of BlackRock, further scepticism arises when considering that it named Coinbase – an exchange that the SEC just sued – as its custodian.
Balchunas however stated that BlackRock’s record of getting ETFs approved by the SEC is 575-1. “That’s another reason this is so big, they don’t play around,” he said.
Nonetheless, the applications have sparked optimism and boosted market sentiment, with Bitcoin rebounding to $28,000 after trading at $24,000 late last week.
Not everyone however is warm to the idea of a Bitcoin ETF landing on a stock market. Despite the positive impact on Bitcoin price action, some have expressed concern that it would open the door to centralisation and price manipulation.
The fundamental nature of Bitcoin is that it’s a decentralised digital currency that operates on a peer-to-peer network, eliminating the need for intermediaries like banks or financial institutions.
Investment firms like BlackRock and WisdomTree, as well as exchanges like Nasdaq, are quite literally intermediaries, which does in theory undermine the purpose of the Bitcoin network.
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