iShares Bitcoin Trust

2023: Filing for iShares Bitcoin Trust Exchange-Traded Fund

In June 2023, BlackRock applied for the creation of the iShares Bitcoin Trust. The investment firm is the largest in the world and it will be the first cryptocurrency fund in the US if it gets approval.

According to a statement from the Nasdaq exchange filed with the US Securities and Exchange Commission (SEC), Coinbase Custody Trust Company will be the custodian of the fund's bitcoin assets, and Bank of New York Mellon will be the custodian of the fund's fiat assets. The BlackRock iShares Bitcoin Trust will trade as shares issued under bitcoin collateral .

Formally, the shares were developed to eliminate obstacles associated with difficulties and operational loads associated with direct investments in bitcoin. In reality, Blackrock simply seeks to provide access to some of the assets that it manages to the crypto market.

The entire capitalization of the crypto market at this time is slightly less than $1 trillion, while BlackRock and affiliated structures manage about $20 trillion. The appearance on the market of such a large player can completely change the current balance of power.

The market price of iShares Bitcoin Trust shares will not be linearly tied to the price of bitcoin and will become the subject of exchange speculation.

In order to control the situation in the BlackRock crypto market, you need your own exchange. BlackRock previously became one of the key investors in the FTX exchange, but due to the bankruptcy of the latter, the project lost its relevance. Therefore, it was decided to gain control of another crypto exchange, and the choice fell on Coinbase.

In early June, not only Binance faced lawsuits from the SEC, which operates in conjunction with BlackRock. Coinbase was charged with offering unregistered securities and working as an unregistered broker. There is a coordinated attack from the SEC and individual state regulators. Coinbase was given a 28-day deadline to justify why it should not be banned from selling unregistered securities.

The SEC filing alleges that 3.5 million accounts were not insured by the Federal Deposit Insurance and Securities Protection Corporation. Thus, customers were deprived of protection from possible losses. SEC chief Gary Gensler noted that Coinbase is denying its clients crucial protections designed to keep them from fraud and manipulation.

So far, the situation is such that Coinbase Custody Trust Company will store the BlackRock cryptocurrency, and BlackRock will sell its trust shares to customers on the NASDAQ exchange.

The flow of part of the population's funds into cryptocurrencies is primarily beneficial to the SEC and the US Treasury, since it will allow linking part of the money supply, which otherwise would have to be disposed of through inflation and an increase in deposit rates.

This is beneficial to BlackRock and large funds, since it is they who will actually monopoly sell their shares secured by crypto assets.