An amended application was submitted by BlackRock for a Bitcoin-focused exchange traded fund (ETF), after the securities regulator expressed some concerns about its first filing.
The Nasdaq exchange submitted a new filing on behalf of BlackRock in which the company stated that a surveillance agreement would be finalized with Coinbase (COIN).
The refiling
This was in response to one of the concerns that the Securities and Exchange Commission (SEC) had highlighted when the previous Bitcoin ETF application had been rejected.
The filing said that Coinbase and Nasdaq would enter into a bilateral surveillance-sharing agreement in order to supplement the market surveillance program of the Exchange.
The spot market data for the proposed ETF’s pricing would be provided by Coinbase, which is the biggest crypto exchange based in the United States, and it will function as the custodian.
There is also a similar agreement between Fidelity and Coinbase, as the former is also seeking approval for its own Bitcoin ETF.
The largest asset manager in the world, BlackRock currently had about $9.5 trillion worth of assets under its management in the first quarter of this year.
The news that it was filing for a Bitcoin ETF saw the price of the pioneer cryptocurrency surge.
The response
The filing had first been reported on June 15th and since then, there has been a 20% rise in the price of Bitcoin, particularly because it resulted in more companies submitting their own ETF applications.
In fact, it resulted in such strong bullishness that even a report from the Wall Street Journal published on June 30th could not bring it down.
The report in question said that the securities regulator found the application submitted by BlackRock to be inadequate.
But, it was a warning and companies did not take long to respond to it, as they immediately modified their applications for the ETF.
Cboe, the exchange operator, also modified the application for a spot Bitcoin ETF that it had submitted on behalf of Fidelity.
ETF registration
It has been an immensely difficult task for companies to register a Bitcoin ETF with the Securities and Exchange Commission (SEC), particularly where spot market trading is concerned.
The SEC has not approved even one application for a spot Bitcoin ETF to date because of concerns of manipulation and fraud in the spot market.
However, the SEC has given the green light to four Bitcoin futures ETFs. ETFs are considered popular investment products because they do not require investors to buy an asset.
With an ETF, investors can invest in stocks, commodities, bonds, and currencies, but without having to actually purchase the asset in question.
People are interested in a Bitcoin ETF because it would enable them to invest in the largest and oldest cryptocurrency in the world and not have to actually hold it.
Instead, the ETF would help them purchase shares that would track the asset’s price, but the SEC has refused to approve such an investment product due to the uncertain and volatile nature of Bitcoin.