BlackRock subsidiary iShares has filed an S-1 registration statement for a Bitcoin-based exchange-traded fund (ETF).
The iShares Bitcoin Trust aims to reflect the performance of the price of Bitcoin, similar to the other ETFs that have attempted to do the same.
To quote the registration statement:
“The Shares are intended to constitute a simple means of making an investment similar to an investment in bitcoin rather than by acquiring, holding and trading Bitcoin directly on a peer-to-peer or other basis or via a digital asset exchange. The Shares have been designed to remove the obstacles represented by the complexities and operational burdens involved in a direct investment in Bitcoin, while at the same time having an intrinsic value that reflects, at any given time, the investment exposure to the Bitcoin owned by the Trust at such time, less the Trust’s expenses and liabilities. Although the Shares are not the exact equivalent of a direct investment in Bitcoin, they provide investors with an alternative method of achieving investment exposure to Bitcoin through the securities market, which may be more familiar to them.”
The Trust hopes to trade on Nasdaq.
CI received a comment from Jeff Feng, co-Founder of Sei Labs, who is also a former Goldman Sachs analyst. Feng points to Soros Fund Management, that mentioned: “Crypto is ripe for a Tradfi takeover.”
Feng noted that BlackRock is attempting to launch a Bitcoin ETF after Vanek, Wisdomtree, and Grayscale ETFs were all rejected by the SEC – so there are substantial hurdles.
“Institutions are recognizing retail investors view crypto as a new generation of global assets with intrinsic value,” said Feng. However, traditional retail exchanges/brokers, such as Robinhood and eToro, are navigating complex terrain when venturing into crypto. The absence of explicit regulatory guidelines has caused setbacks, leading to some tokens being delisted, resulting in crypto market volatility. Nonetheless, these teething issues are part of the broader industry’s evolutionary process.”
Alex Adelman, CEO and co-founder of Lolli, also shared his thoughts on BlackRock’s attempt to get into the Bitcoin space.
“As the world’s largest asset manager, BlackRock’s initiative to file a Bitcoin ETF shows that there is increasingly strong demand for exposure to bitcoin among its clients, which include some of the biggest institutions in the world. The timing of the filing, amid high-profile regulatory actions towards crypto from the SEC, shows that BlackRock sees a strong opportunity to be among the first to invest in bitcoin-related offerings with an increasingly hands-on regulatory regime. Bitcoin’s price has maintained a strong momentum with the SEC’s recent actions, reflecting long-standing investor demand for greater regulatory clarity. The SEC has also made it increasingly clear that Bitcoin is not a security and thereby not under its purview, which is driving increased interest and investments in bitcoin as a commodity.”
Adelman said that with interest rate hikes, weakness in the banking sector, and debt ceiling concerns, investors see Bitcoin as a safe haven.
“BlackRock’s actions foretell that there will be a new wave of institutional bitcoin-related financial products to come, as other leaders on Wall Street quickly follow in BlackRock’s footsteps.”
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