According to the filing, Coinbase will securely hold and manage the actual Bitcoin assets that underpin the ETF. The company has also confirmed that the Bitcoin ETF will be listed and traded on the Cboe BZX Exchange, Inc.
Franklin Templeton, an asset management company, has entered the competition among companies aiming to offer spot Bitcoin ETFs. This was made known through a September 12 filing with the Securities and Exchange Commission (SEC).
According to the filing, Coinbase will securely hold and manage the actual Bitcoin assets that underpin the ETF. The company has also confirmed that the Bitcoin ETF will be listed and traded on the Cboe BZX Exchange, Inc., enabling investors to buy and sell the ETF freely.
An exchange-traded fund (ETF) is a financial product that tracks the price of an underlying asset. In this case, a Bitcoin ETF would be backed by Bitcoin, meaning it would mirror Bitcoin’s price movements. This allows individuals to gain exposure to Bitcoin price fluctuations without direct ownership of the cryptocurrency.
When investors purchase a Bitcoin ETF, they acquire shares of a fund utilizing Bitcoin as its underlying asset. One of the key advantages of the proposed spot Bitcoin ETF is its potential to diversify investment options, as investors can acquire the ETF as they would publicly traded securities. This move could contribute to greater adoption and awareness of cryptocurrencies within the broader financial ecosystem.
Numerous traditional financial institutions have entered the race to launch Bitcoin ETFs. This includes prominent players such as BlackRock, Wisdom Tree, Fidelity, Invesco, Vaneck, and others within the financial industry. Franklin Templeton already has a reputation for offering structured investment products like mutual funds and ETFs, which makes its application to venture into the Bitcoin ETF space not come as a surprise.
The SEC’s Cryptocurrency Regulation amidst the Competition for Spot Bitcoin ETFs
Initially, the SEC rejected all spot Bitcoin ETF applications, citing concerns about the companies’ ability to safeguard investor funds from market manipulation. Following Grayscale, BlackRock also applied to offer this asset in June, and additional companies have since joined the race.
Given the increasing interest from traditional financial institutions in offering Bitcoin ETFs, it is possible that the SEC will have no option but to grant permission to companies that meet the required standards. Many analysts predict that such permission may be granted to a company in early 2024.
Successfully granting permission to issue this asset could prompt the SEC to establish a more defined regulatory framework for cryptocurrency users and businesses. In the United States, numerous crypto-related businesses currently operate without clear regulatory standards. Recent developments, including the resignation of a US CEO and layoffs within the country, underscore the need for a comprehensive regulatory framework. Coinbase has also initiated efforts to raise awareness about the necessity of such a framework for crypto services and companies.
Many experts agree that approval of the spot Bitcoin ETF could foster a more positive sentiment toward broader cryptocurrency adoption.