Bitcoin ETFs In Motion: An Analysis Of Open Spot BTC ETF Applications In The Market

  • Over the past few weeks, many proposals for a spot Bitcoin ETF in the United States have been filed, including applications from BlackRock, WisdomTree, etc.
  • All previous attempts by firms to get a spot Bitcoin ETF have been futile as the SEC continues to push back, citing threats of market manipulation.
  • The recent applications have led to a spike in the price of Bitcoin, leading to the top asset surging to a one-year high.

The digital asset community awaits the first spot Bitcoin (BTC) Exchange Traded Fund (ETF) after many rejections by the Securities and Exchange Commission (SEC).

An ETF is a type of investment fund that tracks the performance of an underlying asset, index, or pool of securities. ETFs give investors a good opportunity to diversify their portfolio at a lower cost as they gain exposure to the underlying asset, in this case, Bitcoin.

The first Bitcoin application came in 2013, and since then, multiple firms have applied, although to no avail. Pro-ETF traders have argued that it is still complicated for users to trade BTC as many are not used to exchanges, especially new entrants but a spot ETF will clear the hurdle. Here are some open spot ETF applications.

BlackRock

BlackRock, the world’s biggest asset manager with over $9 trillion worth of assets under management, officially filed for a BTC spot ETF on June 15, 2023. The proposed filing would see Coinbase as the asset custodian and market data provider, while BNY Mellon would act as the cash custodian. The move came as a shock to many in both decentralized finance (DeFi) and traditional finance (TradFi).

Though previous applications have been denied by the SEC, industry experts opined that BlackRock’s application is the “real deal” because of the firm’s success rate with the SEC, which stands at 575-1. Recently, ex-Barclays CEO Bob Diamond praised the company, saying it has created a pathway for institutional investors.

Ark Invest

Ark Invest filed its first application in June 2021 in partnership with 21Shares and would trade on Cboe’s BZX exchange. The company’s proposal got rejected twice, with the latest being in Jan 2023. The company has made its third application with hopes for a different story. Ark Invest has invested massively in the digital asset space, including Coinbase, Square, and Grayscale Bitcoin Trust.

WisdomTree

Like Ark Invest, WisdomTree has previously seen the SEC reject its BTC spot ETF application. It recently reapplied days after BlackRock’s application. Initially, crypto enthusiasts thought that the firm’s application would scale through as the SEC invited members of the public to comment on the safety of the ETF. However, the Commission rejected the proposal in 2021.

Invesco Galaxy and Valkyrie Investments

Both firms filed for new spot ETF applications after BlackRock, pushing up the number of open ETF filings. Invesco initially filed in Sept 2022 and proposed an ETF backed by physical Bitcoin rather than derivatives. The firm boasts as the fourth largest ETF provider in the United States, a criterion many observers believe would be helpful in the long run. Valkyrie made its first BTC ETC application in 2021, a proposal that draws reference to the Chicago Mercantile Exchange’s price for Bitcoin.

Just like others, the SEC denied the application, but the company did not back down. In 2022, it obtained a BTC mining ETF from the SEC, a moving instrument backed by mining firms that use renewable energy for at least 77% of their operations, including Stronghold Digital, Cleanspark, Argo Blockchain, Bitfarms, etc. 

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