iShares, a division of investment firm BlackRock, has filed documents with the U.S. Securities and Exchange Commission (SEC) to register the iShares Bitcoin Trust, a bitcoin-based investment trust. If approved, the trust’s shares will be traded on NASDAQ.
BlackRock is one of the world’s largest investment companies and the largest in terms of assets under management, with around 1,000 funds totaling over $9 trillion in assets (as of the end of March). The company also manages the Circle Reserve Fund, the issuer of the second-largest stablecoin, USD Coin (USDC), with approximately $24.7 billion in assets.
Bitcoin Trust and spot bitcoin ETFs are financial products designed to track the real price of bitcoin. Their purpose is to provide investors with regulated and familiar access to BTC without actually owning the cryptocurrency.
Spot funds based on futures differ from spot-based products in that they offer investors access to futures contracts rather than the underlying asset.
The iShares Bitcoin Trust primarily consists of bitcoins, which will be held by Coinbase, according to the company’s statement. The trust’s cash will be held by the Bank of New York Mellon.
If approved, this trust could become the first spot-based exchange-traded product based on bitcoin in the United States. This is at least the 33rd attempt by issuers to create spot-based products tied to BTC. Previous applications were rejected by regulators citing concerns in the crypto market and investor protection.
The SEC twice denied applications for spot bitcoin ETFs from 21Shares and ARK Investment Management. Additionally, a third application from VanEck for a spot bitcoin ETF was rejected by the regulator.
However, futures-based ETFs tied to bitcoin received approval from the SEC. The first of these was the Bitcoin Strategy ETF by ProShares, with shares becoming available to investors on the New York Stock Exchange in October 2021.
Last year, SEC Chairman Gary Gensler explained that spot-based fund applications did not meet the standards of the Securities Act in terms of preventing fraudulent or manipulative practices, leading to their rejection by the commission.
