The competition to introduce a spot Bitcoin exchange-traded fund (ETF) in the United States is heating up as two investment companies have recently submitted fresh filings to the Securities and Exchange Commission (SEC) for ETFs centered around the popular cryptocurrency.
Quick facts:
- WisdomTree and Invesco file new applications for spot Bitcoin ETFs, joining the race for SEC approval.
- BlackRock’s filing includes a surveillance sharing agreement with the CME futures markets, emphasizing regulatory oversight.
- The filings reflect growing recognition of cryptocurrencies and a desire to provide regulated avenues for Bitcoin exposure, with competition intensifying due to BlackRock’s involvement.
WisdomTree, an asset management firm, has lodged a filing for its proposed WisdomTree Bitcoin Trust. The company aims to list the ETF on the Cboe exchange.
Additionally, Invesco, a prominent asset manager with assets under management totaling $1.4 trillion, has also submitted an application for its own spot Bitcoin ETF named the Invesco Galaxy Bitcoin ETF.
It is worth noting that both companies have previously attempted to launch a Bitcoin ETF but faced obstacles from the SEC, preventing their success.
In 2021, Invesco initially filed for a spot Bitcoin ETF in collaboration with Galaxy Digital, led by Mike Novogratz. WisdomTree has made a fresh filing for a spot Bitcoin ETF, marking its third attempt to gain approval from the U.S. SEC.
The previous two applications by WisdomTree were rejected by the SEC in December 2021 and October 2022, citing concerns related to fraud and market manipulation. Despite these setbacks, WisdomTree currently manages around $83 billion in assets.
In contrast to WisdomTree’s previous applications, one notable distinction in BlackRock’s recent filing is its plan to establish a “surveillance sharing agreement” with the Chicago Mercantile Exchange (CME) futures markets. This agreement indicates BlackRock’s intention to enhance regulatory oversight and monitoring of the proposed ETF.
The proposal put forth by BlackRock references the SEC’s approval of a Bitcoin futures fund by investment advisory firm Teucrium, highlighting the importance of comprehensive surveillance of market conditions and price movements to prevent distortions and manipulative efforts.
WisdomTree’s filing also echoes this sentiment, expressing willingness to enter into a surveillance agreement with a US-based spot trading platform for Bitcoin.
Notably, soon after WisdomTree’s application, global investment manager Invesco promptly “reactivated” its own application for a similar product, indicating the increasing competition and interest surrounding spot Bitcoin ETFs.
The Race for a Spot Bitcoin ETF Approval
The pursuit of spot Bitcoin ETFs by multiple investment firms signifies the growing recognition and acceptance of cryptocurrencies within traditional financial markets. These developments indicate a desire to provide investors with regulated and accessible avenues for exposure to the potential benefits of Bitcoin.
In its filing, Invesco pointed out a unique characteristic of the United States among major markets, stating that it lacks a vehicle for direct spot exposure to Bitcoin. This stands in contrast to several other countries, including Canada and Brazil, where investors have access to more traditional exchange-listed and traded products that allow them to gain exposure to Bitcoin.
In highlighting this disparity, Invesco emphasized the importance of bridging the gap in the U.S. market by offering similar avenues for investors to access Bitcoin in a manner that aligns with established market practices.
The quest for SEC approval of a spot Bitcoin ETF is still ongoing, with no product receiving the green light as of yet. However, the recent filing by BlacRock has revitalized the competition in this space. Eric Balchunas, a senior ETF analyst at Bloomberg, acknowledged the renewed vigor in the race, attributing it to BlackRock’s foray into the spot Bitcoin ETF arena.
