Investment management giant BlackRock has applied for Bitcoin exchange traded fund (ETF) with Coinbase as custodian. The filling with U.S. Securities and Exchange Commission (SEC) seeks to launch the iShares Bitcoin Trust. This could be a major positive for Bitcoin and cryptocurrencies in general. Blackrock is the largest asset management company across the world and many high net worth investors and government funds could see cryptocurrencies as an investment option after this step from Blackrock.

SEC has not approved any spot bitcoin ETFs so far. This could bring in a lot of institutional exposure to Bitcoin. Many companies and asset managers have filed for spot Bitcoin ETF in the past but majority of them have pulled their application. SEC has filed lawsuits against Coinbase and Binance earlier this month over alleged violations of securities laws. Cryptocurrency sector has been criticized by governments across the world and financial regulators are still figuring out ways to control and tax these assets. If Blackrock is successful in getting spot Bitcoin ETF approved, this could lead to many other companies launching spot cryptocurrency ETFs. In the past, SEC has rejected applications from Fidelity, Cboe Global Markets and NYDIG for Bitcoin Spot ETFs. SEC has approved Bitcoin Futures ETF and this is one of the reasons many asset management companies are trying to get approval for spot bitcoin ETFs.

As per Blackrock SEC filing, “The Shares are intended to constitute a simple means of making an investment similar to an investment in bitcoin rather than by acquiring, holding and trading bitcoin directly on a peer-to-peer or other basis or via a digital asset exchange.” Blackrock has strategic partnership with Coinbase. Coinbase is the largest cryptocurrency exchange in terms of volume in the United States. Coinbase will act as custodian for Blackrock spot bitcoin ETF. As per the filling, Blackrock would determine the value of the Bitcoin in its trust each day with reference to the CF Benchmarks Index. The investment fund claims that spot ETF would offer an easier way for clients to get exposure to cryptocurrencies.

Leading cryptocurrency asset manager Grayscale Investments is currently in a legal battle to convert Grayscale Grayscale Bitcoin Trust into an ETF. Grayscale manages over $50 billion in assets currently.

As per Coindesk report, Blackrock has better chances of getting approval for its Spot ETF. Coindesk added, “Surveillance-sharing agreements allow for the sharing of information about market trading activity, clearing activity, and customer identification, allowing for little possibility of market manipulation. Blackrock included a surveillance-sharing agreement in its proposal, which could eliminate the risk of market manipulation related to bitcoin.”

Graeme Moore, Head of Tokenization, Polymesh Association commented on Blackrock’s application. In his comments to Coindesk, Moore said, “The SEC is very concerned with market manipulation related to Bitcoin prices, and has cited this in almost, if not all, previous rejections.”

Cryptocurrencies are facing low interest in the recent times and major cryptocurrencies have fallen over 50 percent from their all-time highs. In the last three months, Bitcoin, Ethereum and the top 10 cryptocurrencies have recovered but these assets still remain highly volatile.