BlockFi Files for a Physically Backed Bitcoin ETF


In conjunction with Neuberger Berman, an investment management company, BlockFi has filed for a physically-backed Bitcoin ETF with the SEC. BlockFi submitted the Form S-1 filing to the US Securities and Exchange Commission on Monday.

According to the filing, BlockFi will serve as the custodian. Additionally, the fund’s investment objective is to reflect Bitcoin’s underlying performance.

Many experts are predicting the approval of the Bitcoin exchange-traded fund (ETF) by this week. Michael ban de Poppe, an analyst, tweeted that he is hopeful that the BlockFi NB Bitcoin ETF could just be the trigger for BTC’s next wave.

However, Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, isn’t hopeful that the ETF can be approved this week. Balchunas believes that unless the SEC head, Gary Gensler, “mentally evolves,” the BlockFi is “on ice with 20 others” like it.

In a letter to SEC’s chair, two US Congressmen, Darren Soto and Tom Emmer, urged Gensler to approve spot BTC ETF. In their letter, they included that investors preferred spot ETFs since they provide investors with direct exposure to the asset.

An Unseen Collaboration

No one saw the collaboration between an affiliate of Neuberger Berman Group LLC and crypto-leading platform BlockFi. The two firms have teamed up to have a joint venture, the first US spot Bitcoin ETF.

The firms paired up in October 2021 with the aim of introducing a number of digital asset management products. The ETF is the fruit of this collaboration. The trust will direct the Custodian to “sell BTC to pay certain expenses.” However, the trust will not directly trade any Bitcoin.

The ETF is set to trade on the New York Stock Exchange. If the SEC approves this ETF, it will be the US’ first spot Bitcoin ETF. The SEC has prevented the approval of such funds for a couple of years. The SEC has in the past raised a number of concerns that have prevented the approval of a spot trust. One such concern is price manipulation.

Even still, issuers within the past month have applied for the approval of their physical ETFs. Some of the issuers that have applied in the past month are Grayscale Investments LLC and Bitwise Asset Management.

Bitcoin Exchange Futures in the US

Source: CoinDesk

The approval filing of the BlockFi ETF comes a month after the SEC approved US’ first BTC exchange-traded fund by ProShares. The difference between a futures-based ETF and spot BTC ETFs is that the first is linked to the spot price while the latter’s fund price is linked to BTC futures.

ProShares’ ETF debuted with the highest-ever first day volume of more than $1 billion. Shortly after the approval of the ProShares ETF, many other ETFs launched and began seeking the approval of the SEC.

Valkyrie’s Bitcoin Strategy ETF was the second futures-based product to be approved in the US by the SEC. Futures-based ETFs have been a hit among investors, and they even impacted BTC’s price. As of the end of October, thanks to the SEC approval of ETFs, institutional managers had purchased Bitcoin products worth more than $2 billion.