Traditional financial institutions and Wall Street are increasingly showing interest in the world of cryptocurrencies, particularly in Bitcoin Exchange Traded Funds (ETFs). These ETFs are gaining traction in the $7 trillion ETF industry and offer a way for investors to directly hold Bitcoin. Leading asset management giants like BlackRock, Fidelity, and WisdomTree have been drawn to the concept.
In response to this interest, these firms have submitted applications for their own Bitcoin ETFs. BlackRock, for instance, has proposed surveillance-sharing agreements to address concerns raised by the Securities and Exchange Commission (SEC) regarding issues like market volatility, value verification, and potential fraud in the cryptocurrency market. Notably, Coinbase, a major cryptocurrency exchange platform, has emerged as a favored partner for these endeavors.
Nevertheless, the SEC’s position on spot Bitcoin ETFs, which involve the direct buying or selling of Bitcoin, remains uncertain. While the regulator has granted approval for futures-backed Bitcoin ETFs like the ProShares Bitcoin Strategy ETF, it has so far rejected spot ETFs.
Following the example set by the United States, Canada introduced its Purpose Bitcoin ETF, further contributing to the growth of Bitcoin ETFs. Investment trusts are also looking to venture into this sector. Grayscale, in particular, successfully transitioned into an ETF despite facing opposition from the SEC, marking another significant development in this evolving landscape.