BlackRock partners with Coinbase for a spot Bitcoin ETF

BlackRock’s (BLK) iShares subsidiary filed papers with the Securities and Exchange Commission (SEC) Thursday afternoon to launch a spot bitcoin (BTC) ETF.

The iShares Bitcoin Trust spot ETF was set up on June 8, and it seeks to represent the performance of the primary cryptocurrency’s price.

After allowing several futures-based bitcoin ETFs, the SEC has denied bids by several fund management companies to launch a spot bitcoin ETF, which includes those from Grayscale, VanEck, and WisdomTree.

It may not be easy for SEC to turn away Blackrock as it is the world’s largest asset manager with more than $10 trillion in Asset under management (AUM) and the company and its CEO Larry Fink influence politics similar to the SEC and its leader Gary Gensler.

As per the filing by the Nasdaq stock market with the US Securities and Exchange Commission (SEC), Coinbase Custody Trust Company would be the custodian of the fund’s Bitcoin holdings, while Bank of New York Mellon would safeguard its fiat. BlackRock’s iShares Bitcoin Trust would be traded as Commodity-Based Trust Shares. 

The ETF aims to issue and redeem shares solely in blocks of 40,000 or integral multiples thereof, with a block of 40,000 shares referred to as a “Basket.”

The number of Bitcoins placed in the trust is not disclosed in the filing.

The filing mentions many risks connected with digital assets, including “extreme volatility,” which might “have a material adverse effect” on the worth of the shares, and the shares might lose all or nearly all of their worth.

Furthermore, the ETF warns in the filing that a temporary or permanent fork might hurt the value of the shares and that shareholders might not get the advantages of any forks or airdrops.

The decision comes at a moment when the crypto industry is suffering from a US regulatory crackdown, which recently saw the SEC sue crypto exchanges Coinbase and Binance.

I am Vishal. I post articles about the cryptocurrency markets. I'm pursuing a BBA degree. My home is in Navi Mumbai, Maharashtra.I'm constantly interested in new advancements in this industry and I learn something new about it every day. I would love to share such information with you all.