In a move that could potentially redefine the landscape of digital assets, BlackRock, one of the globe’s leading asset managers, has officially filed an application with the US Securities and Exchange Commission (SEC). The application pertains to establishing a new exchange-traded fund (ETF) with its direct investments in Bitcoin. Interestingly, the custodianship of the deposit would be managed by Coinbase, a premier US-based digital currency exchange, and custodial service.

This development is particularly notable as the SEC, to date, has not endorsed ETFs that directly invest in digital assets like Bitcoin. It has, however, greenlit ETFs that invest in Bitcoin derivatives. The emergence of a Bitcoin-focused ETF in the US would represent a significant inflection point for the digital asset ecosystem, potentially facilitating investors to acquire Bitcoin via traditional exchanges conveniently.

The proposal for the ETF’s creation is awaiting SEC’s approval. BlackRock, a highly reputable entity in the asset management sector, has a well-established relationship with the US Federal Reserve, serving as a key consultant and advisor on financial market policy. Over the past decade, BlackRock has filed applications for an impressive 576 ETFs, with the SEC approving all but one. Hence, it will be intriguing to observe whether SEC provides the green light for this groundbreaking fund, which could significantly bolster investor access to Bitcoin.

The inception of this Bitcoin ETF could be seen as a pivotal moment akin to the advent of the first gold ETF (GLD), launched by State Street in 2004. The gold ETF opened up opportunities for investors to participate in the gold market via traditional, cost-effective financial channels. Although no US ETF has replicated its remarkable growth trajectory, today, it commands a substantial valuation of approximately $58.8 billion, making it one of the 20 largest ETFs globally.

Earlier this year, BlackRock displayed an increasing interest in digital assets by incorporating Bitcoin into its largest international investment fund. The fund boasts a remarkable size of nearly $19 billion and invests in a diversified range of securities and financial products. Historically, it has consistently ranked among the best-performing funds in its category regarding return on investment.

Larry Fink, CEO of BlackRock, acknowledged last year the increasing interest in Bitcoin among institutional investors. He stated that Bitcoin stands a genuine chance to supersede gold as a preferred investment option. Fink further emphasized his conviction that blockchain technology would play an integral role in financial markets, particularly once securities become tokenized in the forthcoming years.