The world of cryptocurrencies is witnessing a surge in institutional interest, driven by recent developments related to Bitcoin exchange-traded funds (ETFs). Following investment giant BlackRock’s bold move to file an application for its own spot Bitcoin ETF, several investment firms have swiftly followed suit.
This growing trend highlights a notable shift in the perception of Bitcoin among traditional financial institutions as they seek to capitalize on the potential of this digital asset. With at least two firms already making new filings and others rumored to join the race, the stage is set for a highly competitive battle to launch Bitcoin ETFs and cater to the evolving demands of institutional investors.
WisdomTree Joins the Bitcoin ETF Race
The latest addition to the list is WisdomTree, a prominent asset management fund based in New York. As per their filing to the United States Securities and Exchange Commission (SEC) on June 21, WisdomTree seeks approval to list its own “WisdomTree Bitcoin Trust” on the Cboe BZX Exchange, with the ticker symbol “BTCW.”
WisdomTree, after two previous unsuccessful attempts, has applied once again for a spot Bitcoin ETF. The SEC rejected their initial application in December 2021, followed by another rejection in October 2022 due to fraud and market manipulation concerns. Presently, WisdomTree oversees approximately $83 billion in assets.
A notable contrast can be observed in BlackRock’s recent SEC filing, as the investment colossus plans to establish a “surveillance sharing agreement” with the Chicago Mercantile Exchange (CME) futures markets. This distinguishes BlackRock’s application from WisdomTree’s latest attempt to obtain regulatory approval for a spot Bitcoin ETF.
BlackRock’s proposal highlights the SEC’s approval of a Bitcoin futures fund by investment advisory firm Teucrium. The SEC ruling acknowledged the CME’s comprehensive surveillance of futures market conditions and real-time monitoring to detect and prevent price distortions, including those resulting from manipulative activities.
Similarly, WisdomTree’s filing echoes this sentiment, expressing willingness to enter into a surveillance agreement with a US-based operator of a spot trading platform for Bitcoin. Both BlackRock and WisdomTree acknowledge the importance of robust surveillance measures to ensure market integrity and counteract potential distortions in the Bitcoin market.
Invesco Follows Suit with Renewed Optimism
A few hours after WisdomTree submitted its application, global investment manager Invesco swiftly “reactivated” its application for a similar product. In accordance with the 19b-4 document, which notifies the SEC of a proposed rule change, Invesco has requested regulatory approval to list its “Invesco Galaxy Bitcoin ETF” on the Cboe BZX exchange.
This move comes following the withdrawal of its previous proposal in October 2021, which was initially submitted earlier that year. The initial retreat was prompted by regulatory challenges, with the SEC expressing concerns about potential fraud and market manipulation surrounding such funds. However, the recent re-filing by Invesco reflects a renewed sense of optimism from the firm, suggesting a potential shift in the regulatory landscape surrounding Bitcoin ETFs.
The recently filed document emphasizes that a spot Bitcoin ETF utilizing professional custodians and other service providers eliminates the reliance on loosely regulated offshore vehicles. Consequently, investors can more easily safeguard their principal investments in Bitcoin.
BlackRock Leads the Way
Although the SEC has yet to approve any spot Bitcoin ETF product, Eric Balchunas, a senior ETF analyst at Bloomberg, remarked that “BlackRock breathed new life into the race” in response to his own tweet discussing the WisdomTree filing. Adding to the optimism surrounding BlackRock’s move, Eric Balchunas highlighted that crypto investors might have good reason to be hopeful.
Balchunas shared that the investment firm boasts an impressive track record of getting ETFs approved by the regulator, with a success rate of “575-1.” In the wake of WisdomTree and Invesco’s recent developments, rumors have started circulating regarding Fidelity Investments, a multi-trillion-dollar fund manager, eyeing the opportunity to tap into the growing demand for spot Bitcoin ETFs.
According to a tweet by AP Abacus, co-founder of Arch Public, Fidelity Investments, managing approximately $4.9 trillion in assets, may consider filing for its own spot Bitcoin ETF. Alternatively, Abacus suggests that the investment firm could explore the option of acquiring Grayscale’s GBTC ETF product.
