Investment giant BlackRock (BLK) filed for bitcoin exchange traded fund (ETF) on Thursday using the Coinbase cryptocurrency exchange (COIN) for escrow and market pricing, which would be the first product of its kind in the US if approved.

Key things

  • BlackRock filed an SEC filing for a bitcoin ETF on Thursday.
  • The app lists Coinbase as the custodian of assets and price data.
  • If approved, it would be the first product of its kind in the US
  • While the SEC has previously approved bitcoin futures ETFs, it has rejected several spot ETF applications for the coin.

The new iShares Bitcoin Trust will be listed on the Nasdaq exchange, and prices will be calculated daily based on the CF CME bitcoin benchmark, which “aggregates the notional value of bitcoin trades on major bitcoin spot exchanges,” it said prospectus. All shares in the ETF will be fully backed by BTC and no new shares can be issued without the supply of the corresponding token value.

But BlackRock’s offer still requires approval from the SEC, which has so far resisted many spot ETF applications.

The SEC is currently involved in a court battle with digital asset management firm Grayscale over its plans to convert its Greyscale Bitcoin Trust (GBTC) from an index-backed futures to a spot index, and may not approve BlackRock’s request pending a court ruling later this year.

In its first oral arguments against the SEC’s Gray Grade cited cited a “fragmented and unregulated” spot market as the reason for its stance, arguing that a regulated futures market provides greater security for investors and pointing to “shared supervision” agreements that protect against market manipulation.

Regulatory approval for the iShares Bitcoin Trust would be a boost for Coinbase after suffering deposit outflows after a separate legal action by the SEC. Regulator defendant a company operating an “illegal exchange”.

Shares of BlackRock ended 2.71% higher on Thursday, while shares of Coinbase gained 0.65%.

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