Investors in the United States have been eager to get a spot Bitcoin (BTC) ETF (exchange-traded fund) for a long time. Unlike other countries like Canada, Brazil, and Dubai where these investment vehicles are available, the US SEC has yet to approve any Bitcoin ETF applications in the country. Despite the fact that the first application was filed in 2013, investors and companies are still holding out hope that it will be approved after a decade of waiting.
What is a Bitcoin ETF?
An ETF is an exchange-traded investment instrument that tracks the value of an underlying asset. In the case of a Bitcoin ETF, the underlying asset is the cryptocurrency itself. This means that investors can gain exposure to Bitcoin through a Bitcoin ETF without needing to own the cryptocurrency directly.
Featured Bitcoin ETF Applications
Although no applications have been approved so far, several prominent companies have filed Bitcoin ETF applications with the SEC. Here are some of the most notable: BlackRock: BlackRock, the world’s largest asset manager, surprised the market by filing an application for a spot Bitcoin ETF on June 15. In its proposal, BlackRock proposed BNY Mellon as the cash custodian and Coinbase as the cryptocurrency custodian and spot market data provider. Given BlackRock’s reputation and size, many expect the SEC to approve their application, which could have a significant impact on the Bitcoin market. Wisdomtree: WisdomTree, a New York-based asset manager, already has experience running a Bitcoin ETF. In 2019, he began trading a Bitcoin ETF on the Swiss SIX stock exchange. In March 2021, WisdomTree filed for a US Bitcoin ETF. The company’s proposal is to list the shares of the WisdomTree Bitcoin Trust on the Cboe bZx exchange under the symbol BTCW. This request has sparked interest due to WisdomTree’s previous experience in handling Bitcoin ETFs. Invesco Galaxy Bitcoin ETF: On September 22, 2021, Galaxy Digital and Invesco jointly filed an application for the Invesco Galaxy Bitcoin ETF. What is interesting about this request is that instead of using derivatives like futures, this ETF would be “physically” backed by Bitcoin. Although Invesco Capital Management LLC is the sponsor of the application, it has not yet been revealed which company will act as custodian of the Bitcoin. Valkyrie Investments: Valkyrie Investments, a relatively new asset manager on the scene, submitted its initial proposal for a Bitcoin ETF in January 2021. Under its proposal, this ETF would use the Bitcoin benchmark price set by the Chicago Mercantile Exchange and would be traded on NYSE Arca. Valkyrie has made a name for itself by partnering with Xapo, a renowned cryptocurrency custodian, to keep the fund’s Bitcoin in cold storage, thus providing greater security for investors. Ark Invest: In June 2021, Ark Invest submitted its application for the Ark21Shares ETF. This application is the result of collaboration between Ark Invest and 21Shares AG, a leading Swiss ETF producer. If approved, this ETF would trade under the symbol ARKB on Cboe’s BZX exchange. In addition to the application itself, Ark Invest has also made a name for itself by being the first company to disclose the costs associated with its Bitcoin ETF. According to his filing, a fee of 0.95% would be charged to 21Shares, which would be used to cover the ETF’s operating costs.
Renewed Hope for Bitcoin Investors
Even though these Bitcoin ETF applications are still awaiting SEC approval, they have generated renewed hope among investors. The arrival of large asset managers such as BlackRock to the Bitcoin market through ETFs could further boost the adoption of this cryptocurrency and increase its liquidity. However, it is important to note that the approval of a Bitcoin ETF in the United States depends not only on the SEC, but also on regulatory and compliance factors. Investors should closely monitor the development of these applications and be attentive to the decisions of the regulatory authorities. In conclusion, while the wait has been long, the list of Bitcoin ETFs awaiting SEC approval is growing. These applications filed by BlackRock, WisdomTree, Invesco Galaxy, Valkyrie Investments, and Ark Invest represent a significant step toward making a Bitcoin ETF available in the US market. Bitcoin investors and enthusiasts are eagerly awaiting approval of these applications, which could open up new investment opportunities in the world’s most popular cryptocurrency.