United States investors have long awaited for a Spot Bitcoin (BTC) ETF (exchange-traded fund). Such investment vehicles are available in a number of countries such as Canada, Brazil and Dubai. However, the U.S. SEC has not approved any application in the country so far. The first Spot BTC ETF application in the U.S. was filed in 2013. However, ten years after the first application, investors and firms still hope for approval.
An ETF is a publicly traded investment instrument that tracks the value of an underlying asset. For a BTC ETF, the underlying asset is Bitcoin. Investors might obtain exposure to Bitcoin through a BTC ETF without holding any digital currency themselves.
Although none have been approved, there are several high-profile BTC ETF applications with the SEC.
Spot Bitcoin ETF Applications in the U.S.
BlackRock, the biggest asset manager in the world, submitted an application for a BTC spot ETF on June 15. The application proposed BNY Mellon as the cash custodian and Coinbase as the crypto custodian and provider of spot market data.
BlackRock’s filing took the crypto market by storm. Many expect the SEC to approve the firm’s application, given the wealth that it manages. Furthermore, the development led to renewed positive sentiment in Bitcoin (BTC), causing the asset’s price to pump.
Asset manager WisdomTree, with offices in New York, has prior experience managing a Bitcoin ETF. In 2019, it began trading the ETF on Switzerland’s SIX stock exchange. However, in March 2021, it filed for one in the U.S. The company proposed listing shares of the WisdomTree Bitcoin Trust on the Cboe bZx Exchange under the symbol BTCW in an S-1 document that was submitted to the SEC.
Invesco Galaxy Bitcoin ETF:
On September 22, 2021, Galaxy Digital and Invesco jointly filed the Invesco Galaxy Bitcoin ETF. Additionally, rather than using derivatives like futures, its ETF would be “physically backed” by BTC. Although Invesco Capital Management LLC is the application’s sponsor, it is yet uncertain which company will hold custody of the Bitcoin (BTC).
Asset management Valkyrie, a relatively new participant in the race, submitted its initial proposal for a Bitcoin ETF in January 2021. The ETF would use the Bitcoin reference price set by the Chicago Mercantile Exchange and trade on the NYSE Arca. The fund’s Bitcoin would be kept in cold storage by crypto custodian Xapo.
In a predictable course of events, the SEC put off making a decision on Valkyrie’s application—along with those of Kryptoin, WisdomTree, and Global X. However, the SEC ended up rejecting them around Christmas 2021.
Ark Invest: In June 2021, Ark Invest submitted their application for the Ark21Shares ETF. moreover, the ARK 21Shares Bitcoin ETF is a product of a collaboration between ARK Invest and 21Shares AG, a Swiss producer of ETFs. If accepted, it would trade with the ticker symbol ARKB on Cboe’s BZX Exchange. Additionally, the company is also the first to disclose the costs associated with its Bitcoin ETF. According to the filing, 21Shares will be charged a fee of 0.95%, which will be used to pay operating costs.