BlackRock files new bitcoin ETF application amid SEC’s concerns

BlackRock has submitted a new application for a bitcoin spot market ETF after the SEC identified flaws in its initial filing. If approved, this would mark the first bitcoin spot ETF to receive regulatory clearance.

In a new filing submitted through Nasdaq, the asset management firm revealed plans to address one of the main objections raised by the Securities and Exchange Commission (SEC) by finalizing a surveillance agreement with Coinbase, the leading US-based crypto exchange.

The amended filing states that BlackRock’s proposed exchange-traded fund (ETF) will heavily rely on Coinbase, serving as the custodian and providing spot market data for pricing.

The asset manager aims to establish a bilateral surveillance-sharing agreement called the Spot BTC SSA between Nasdaq and Coinbase to enhance market surveillance. This agreement is designed to complement the exchange’s existing market surveillance program.

News of BlackRock’s application for a bitcoin spot ETF caused a notable price surge. Since the initial report on June 15, the cryptocurrency has experienced a 20% increase in value. This positive market sentiment persisted despite a June 30 report indicating that the SEC found BlackRock’s initial application inadequate.

The SEC has historically expressed concerns about potential fraud or manipulation in the spot market, making registering a bitcoin spot ETF challenging.

Notably, no application for such an ETF has been approved thus far. However, the SEC has approved four bitcoin ETFs related to futures trading, highlighting the distinction between the two types of ETFs.

ETFs enable investors to gain exposure to various assets without direct ownership, including commodities, currencies, stocks, or bonds. In the case of a bitcoin ETF, investors can participate in the price movement of Bitcoin without possessing the cryptocurrency itself. Instead, they can purchase shares that track the digital asset’s value.

Following BlackRock’s revised application, other companies swiftly entered the race by filing their own ETF applications. Fidelity, which has partnered with Coinbase for similar services, saw its exchange operator, Cboe, modify its application for a Bitcoin spot ETF on the same day as the Wall Street Journal report.