Invesco and WisdomTree Join the Race for Spot Bitcoin ETF
- Investment firms Invesco and WisdomTree both followed the example of BlackRock from last week, and filed for their own spot Bitcoin ETFs with the U.S. SEC.
- Although the SEC is yet to approve a single spot Bitcoin ETF product, ETF analysts say there is a good chance BlackRock is the first considering its history with ETFs.
Shutterstock
Last week’s application for a spot Bitcoin exchange-traded fund (ETF) from investment giant BlackRock has inspired at least two investment funds to reopen their efforts, and submit their own filings to the U.S. Securities and Exchange Commission (SEC).
Major investment manager Invesco — which has around $1.4 trillion in assets under management — became the most recent firm to request the SEC’s approval for its own spot Bitcoin ETF on 21 June. The firm had originally filed for a Bitcoin ETF together with Mike Novogratz’s Galaxy Digital in 2021, but later abandoned the effort after several other Bitcoin ETF applications were rejected by the SEC.
Invesco’s new application requests that the regulator allows it to list its “Invesco Galaxy Bitcoin ETF” product on the Cboe BZX exchange, arguing that the lack of spot Bitcoin ETF was pushing investors towards riskier alternatives. The application also addressed the SEC’s concern for a potential market manipulation, noting that approval for a spot Bitcoin ETF depended on a “surveillance sharing agreement” with a major regulated market.
The surveillance sharing agreement allows for the exchange of information regarding market trading activity, clearing activity, and customer identification, which significantly reduces the potential for market manipulation. BlackRock also advocated for a surveillance sharing agreement in its application last week, arguing that NASDAQ could be used to fill in this role.
New York-based asset management fund WisdomTree — which oversees around $83 billion in assets — filed its own application for a spot Bitcoin ETF only hours before Invesco, requesting that its “WisdomTree Bitcoin Trust” is allowed to list on the Cboe BZX Exchange under the “BTCW” ticker. The SEC had rejected the firm’s ETF applications two times in the past — in December 2021, and October 2022 respectively — due to concerns of fraud and market manipulation. Similarly to BlackRock and Invesco, WisdomTree said it also intends to enter into a surveillance sharing agreement with “an operator of a US-based spot trading platform for Bitcoin”.
All these spot Bitcoin ETF applications were spurred by BlackRock, the largest investment firm in the world, which last Thursday surprised the market with its own filing. Bloomberg’s senior ETF analyst, Eric Balchunas, noted that crypto investors had a good reason to be optimistic about this particular spot Bitcoin ETF application, considering BlackRock had a “575-1” record of getting its ETFs approved by the regulator.
- During an interview with FT, CEO Brian Armstrong said that before the lawsuit a SEC staff member had said that all crypto except BTC was security, and should be delisted.
- When asked how he came to that conclusion, the SEC staff member reportedly said “we’re not going to explain it to you, you need to delist every asset other that Bitcoin”.
Coinbase CEO Brian Armstrong appears on stage at the 2014 TechCrunch Disrupt Europe/London, at The Old Billingsgate on October 21, 2014 in London, England. Anthony Harvey/Getty Images for TechCrunch
- A federal judge ruled that the sale of XRP through exchanges and algorithms did not qualify as selling securities, which could have a major impact on several SEC lawsuits.
- The institutional sale of the token, however, did violate federal securities laws, and the lawsuit between the SEC and Ripple will have to go to trial.
- Binance had filed a complaint against a 17 June SEC press release, claiming that the regulator had made “misleading” statements that could have tainted the jury pool.
- The presiding judge rejected the complaint by saying that it was not the court’s mandate to “wordsmith” public statements, and that it was not clear if the statements had any effect on the case.