BlackRock's iShares Files Paperwork for Spot Bitcoin ETF

The iShares unit of fund management giant BlackRock (BLK) filed paperwork Thursday afternoon with the U.S. Securities and Exchange Commission (SEC) for the formation of a spot bitcoin (BTC) ETF.

To be named the iShares Bitcoin Trust, the fund's assets are to "consist primarily of bitcoin held by a custodian on behalf of the Trust," according to the filing. That custodian will by crypto exchange Coinbase (COIN), said the filing.

CoinDesk earlier on Thursday reported on BlackRock's intention to soon file for a bitcoin ETF.

Though approving a number of futures-based bitcoin ETFs, the SEC has notably rejected other fund management company attempts at opening a spot bitcoin ETF, including those from Grayscale, VanEck, and WisdomTree.

BlackRock, however, may not be as easy for the SEC to turn away. It's the world's largest asset manager with more than $10 trillion in assets under management (AUM) and the company and its CEO Larry Fink has political power to possibly match that of the SEC and its leader Gary Gensler.

"The proposed ETF is benchmarked against the CME CF Bitcoin Reference Rate," said Sui Chung, CEO of CF Benchmarks, a subsidiary of crypto exchange Kraken, commenting on the filing.

"CF Benchmarks takes price data exclusively from cryptocurrency exchanges that adhere to the highest possible standards of market integrity and transparency. This protects investors as products benchmarked against it can then consistently and reliably track the spot price of the underlying asset," Chung added.

The move comes at a time when crypto industry is reeling from U.S. regulatory crackdown, which recently saw the SEC suing crypto exchange Coinbase and Binance. The market sentiment, following the filing of the ETF application by a TradFi giant, seem to have gotten a slight boost as the price of bitcoin is gained a bit on the news, rising to just shy of $25,600.

“BlackRock’s increasing engagement shows Bitcoin continues to be an asset of interest for some of the world’s largest financial institutions,” said Chung.

UPDATE (22:20 UTC, June 15, 2023): Adds additional context and comment from Kraken.

UPDATE (22:44 UTC, June 15, 2023): Adds additional context and comment from CF Benchmarks.