• BlackRock, the world’s biggest asset manager with over $9 trillion in AUM, submitted its spot Bitcoin ETF filing with the United States Securities and Exchange Commission (SEC) on June 15.
• This spurred several Bitcoin ETF hopefuls to make fresh applications despite repeated rejections from the SEC in the past.
• An ETF is an investment vehicle that tracks the value of an underlying asset and provides investors with exposure to cryptocurrencies without needing to understand how crypto exchanges, private keys, and wallets work.
What is a Spot Bitcoin ETF?
A Spot Bitcoin exchange-traded fund (ETF) is an investment vehicle that tracks the value of underlying assets and allows investors to gain exposure to Bitcoins without needing to understand how crypto exchanges, private keys, and wallets work. It also relieves them of the stress of physically buying and holding digital assets.
Who is BlackRock?
BlackRock is the world’s largest asset manager with over $9 trillion in AUM (assets under management). On June 15th 2021 they submitted their spot Bitcoin ETF filing with the United States Securities and Exchange Commission (SEC). This move has sparked a lot of interest from other traditional finance giants in applying for similar funds.
Why are Companies Applying for Spot Bitcoin ETFs?
The application frenzy was triggered by BlackRock’s submission as it renewed hope among US institutions that they would be able to get approval from regulators for their proposals concerning cryptocurrency investments. Additionally, this news caused BTC prices to surge past $30,000 which was a multi-month peak at that time.
What are the Benefits of a Spot Bitcoin ETF?
With a Spot Bitcoin ETF investors would benefit from exposure to cryptocurrencies without having any burden associated with buying or holding digital assets such as understanding crypto exchanges or managing private keys or wallets. It also enables them to have indirect access to cryptocurrency markets through traditional financial institutions instead of going through crypto exchanges directly which can be more cumbersome and complicated for some users.
Conclusion
In conclusion, after BlackRock’s submission there has been a flurry of applications for spot bitcoin ETFs from numerous US firms hoping for approval by regulators in order expose investors to cryptocurrencies through traditional financial tools such as exchange-traded funds. The potential benefits include exposure without needing technical knowledge about crypto exchanges or handling private keys/wallets plus indirect access via traditional finance companies instead of dealing directly with crypto exchanges
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