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Investment Firms Respond to BlackRock's Action
BlackRock's application for a spot Bitcoin Exchange-Traded Fund (ETF) has set off a chain reaction, prompting investment firms such as WisdomTree and Invesco to submit their applications for Bitcoin ETFs. This sequence of events followed the submission of BlackRock's application for a spot Bitcoin ETF on June 15, triggering other investment firms to initiate similar filings.
WisdomTree Joins the Queue
The most recent firm to hop onto the Bitcoin ETF bandwagon is WisdomTree, an asset management firm based in New York. In a new filing to the United States Securities and Exchange Commission (SEC) on June 21, WisdomTree has sought approval to list its "WisdomTree Bitcoin Trust" on the Cboe BZX Exchange under the ticker "BTCW".
This isn't WisdomTree's first attempt at filing for a spot Bitcoin ETF; previous applications submitted in December 2021 and October 2022 were rejected by the SEC due to concerns about potential fraud and market manipulation. As of now, WisdomTree has approximately $83 billion worth of assets under management.
BlackRock's Innovative Surveillance Agreement
One feature that distinguishes BlackRock's recent application is its intent to establish a "surveillance sharing agreement" with the Chicago Mercantile Exchange (CME) futures markets. The proposal refers to the SEC's approval of a Bitcoin futures fund by Teucrium, emphasizing that the CME maintains a vigilant eye on futures market conditions to avert price distortions, including those triggered by manipulative actions.
This pledge has been echoed in WisdomTree's application, with the firm stating its willingness to enter into a similar surveillance agreement with "an operator of a US-based spot trading platform for Bitcoin".
Invesco Revives its Application
Shortly after WisdomTree's application—less than four hours to be precise—Invesco, a global investment manager, "reactivated" its application for an analogous product. The firm has requested the SEC to permit the listing of its "Invesco Galaxy Bitcoin ETF" on the Cboe BZX exchange.
Invesco's filing highlights that a spot Bitcoin ETF utilizing "professional custodians and other service providers" eliminates the dependence of investors on "loosely regulated offshore vehicles", thereby providing them with enhanced means to "protect their principal investments in Bitcoin".
Anticipating Approval
Despite the SEC yet to approve any spot Bitcoin ETF product, Bloomberg's senior ETF analyst Eric Balchunas has remarked that "BlackRock breathed new life into the race". He further expressed that given BlackRock's commendable record of obtaining ETF approvals from the regulator, there's a good reason for crypto investors to hold onto their optimism.
Fidelity Investments: The Next Player?
Amid these developments, there's a buzz that Fidelity Investments, the multi-trillion-dollar fund manager, might also be contemplating entering the spot Bitcoin ETFs arena.
According to a June 19 tweet by Arch Public co-founder AP_Abacus, Fidelity Investments—which handles around $4.9 trillion in assets—might either file for its own spot Bitcoin ETF or make an offer on Grayscale’s GBTC ETF product. However, Fidelity is yet to confirm these speculations.
