The United States Securities and Exchange Commission (SEC) recently accepted BlackRock’s application to create a Bitcoin ETF. This SEC decision is a major turning point for the cryptocurrency industry and the giant BlackRock, the world’s largest asset manager. This can have consequences for investors and financial markets.
Updated on 15/07/2023 at 21:56
SEC Accepts BlackRock’s Bitcoin ETF Request Despite Its Stance on Cryptocurrencies
The United States Securities and Exchange Commission (SEC) has accepted BlackRock’s request to create an ETF bitcoin spot. It is the first cash-based Bitcoin ETF to be approved by the SEC. The latter had previously rejected no less than 30 similar requests.
This decision paves the way for greater adoption of Bitcoin by institutional investors and individuals. They can now access cryptocurrency without having to hold it directly.
Bitcoin ETF, how does it work?
A Bitcoin ETF is a type of exchange-traded fund that tracks Bitcoin’s performance. By buying shares in the ETF, investors can indirectly invest in Bitcoin without having to own it directly. This provides a more accessible and easier way to invest in cryptocurrency.
Acceptance of BlackRock’s request by the SEC marks the start of the formal review process for Bitcoin ETF proposals. This is actually the first step in a long regulatory process. He still indicates that the SEC is open to the idea of a Bitcoin (BTC) spot ETF. The US federal agency would therefore be ready to assess the potential effects of crypto on the market.
The Securities and Exchange Commission’s decision may encourage other market participants to file similar requests. Bitcoin, as an investment asset, is obviously legal.
Will SEC Accept BlackRock’s Bitcoin ETF Application for Its Monitoring Sharing Agreement?
BlackRock has partnered with Coinbase to meet SEC requirements in monitoring, security and transparency for its Bitcoin ETF. Coinbase Custody would handle the ETF’s Bitcoins, while BNY Mellon would handle the cash. Data from Coinbase will be used to calculate the value of the ETF.
One of the SEC’s biggest concerns with a spot Bitcoin ETF is the potential for market manipulation. BlackRock’s request proposes surveillance sharing agreement which could minimize this risk. This agreement will help control fraud and manipulation by introducing a mechanism to track trading, clearing and client identity activities.
The race to be the first company to launch a Bitcoin ETF in the US is seen by many as a positive sign for the crypto industry. Several companies, including BlackRock, Fidelity and VanEck, have filed with the SEC. Then the chances of approval increase. It also allows the SEC to evaluate different strategies and concerns.
If a Bitcoin ETF is approved, it would pave the way for greater institutional adoption of Bitcoin.