In a flurry of Friday afternoon activity, Fidelity Investments, Invesco, VanEck and WisdomTree filed a fresh set of applications for a spot Bitcoin exchange-traded fund, following earlier comments from the US Securities and Exchange Commission that indicated previous applications were insufficient.
The four issuers are among eight companies, also including BlackRock Inc., that are seeking to launch what would be an initial crop of US spot Bitcoin ETFs. All of the four indicated in their filings that Coinbase Global Inc. will provide market surveillance in support of their funds, a fact that wasn’t included in previous iterations.
Coinbase is also in line to provide such services for the other proposed funds, including BlackRock’s as well as Valkyrie’s, 21Shares’ and Bitwise’s, according to a person familiar with the matter who wasn’t authorized to speak about the deals publicly. BlackRock and these other issuers declined to confirm whether Coinbase would be involved.
Crypto market surveillance may be key to gaining Securities and Exchange Commission’s approval for a spot Bitcoin exchange-traded fund. The surveillance can dramatically reduce fraud and market manipulation, which were top reasons for why the agency rejected around 30 spot Bitcoin ETF applications to date.
Coinbase’s involvement with the fresh crop of ETFs could mean a revenue influx at a time when the crypto exchange industry is suffering from low volumes. Coinbase’s revenues last year were less than half of 2021, when the industry was in a bull market. The news also comes during its battle with the SEC, which accused Coinbase of running an illegal exchange.
Following BlackRock’s filing for the ETF in mid-June, seven other firms filed or refiled for spot ETFs as well amid market optimism that the SEC will reverse its long-standing view that the funds shouldn’t be allowed. In an evidence of a thaw, the agency has already allowed a futures ETF in 2021.
