BlackRock’s Spot Bitcoin ETF Not The Same As Grayscale’s Product, Experts Say

While both are technically trusts, there’s one key distinction which makes Blackrock’s proposed investment vehicle an exchange traded fund (ETF).

AccessTimeIconJun 16, 2023 at 8:44 p.m. UTC

Exchange Traded Fund (ETF) terminology can sometimes be tricky, and fund management giant BlackRock’s application for a spot Bitcoin ETF has raised some questions.

To review, BlackRock’s (BLK) iShares unit on Thursday filed an application with the U.S. Securities and Exchange Commission (SEC) for creation of the iShares Bitcoin Trust.

The name and other details of the proposal sparked some confusion among industry experts as to whether BlackRock was applying for an ETF or a trust with properties similar to the Grayscale Bitcoin Trust (GBTC).

The answer is both.

“It’s a reminder of just how complex ETF terminology is,” Noelle Acheson, editor of Crypto is Macro Now, said. “Technically, BlackRock's proposal is for a trust, but it's a trust that allows redemptions, so it functions just like an ETF.”

In this sense, Acheson noted, the iShares product is nothing like GBTC, which has no redemption mechanism. “The market hears ‘trust’ and thinks it will be like GBTC with no redemptions, but that's not the case here,” Acheson said.

The key distinction is that an ETF for spot bitcoin “would be able to buy bitcoin at the end of the trading day to bring the fund's assets in line with its trading price. A trust does not have the ability to do this,” Joe Consorti, market analyst at The Bitcoin Layer said.

A trust will thus occasionally trade higher or lower than the value of its underlying assets – sometimes substantially – an issue currently facing GBTC which has been changing hands at a wide discount (currently about 40%) to its net asset value for years.

Grayscale has been attempting to convert its trust to a spot bitcoin ETF for some time, but has been rejected in that effort by the SEC, which cited worry about market manipulation, among other concerns.

BlackRock is hoping to get past the market manipulation, with CoinDesk reporting earlier on Friday that the fund manager’s application includes a promise of a “surveillance-sharing agreement” between exchanges.

Edited by Stephen Alpher.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Helene Braun

Helene is a New York-based news reporter at CoinDesk covering U.S. crypto exchanges and Wall Street. She is a recent graduate of New York University's business and economic reporting program and has appeared on CBS News and Nasdaq TradeTalks where she talked about the market. She holds BTC and ETH.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.