The financial world has been abuzz since BlackRock, the world’s largest asset manager, filed for a spot Bitcoin ETF. This move has reignited hopes for regulatory approval of a long-sought-after investment vehicle and triggered ripple effects across cryptocurrency markets and related financial products.
This article outlines the current status of BlackRock’s iShares Bitcoin Trust application, explains the U.S. Securities and Exchange Commission (SEC) review process, and analyzes how this development is influencing other Bitcoin-related funds like Grayscale’s GBTC and Ark 21Shares’ proposed ETF.
Why BlackRock’s Application Matters
On June 15, BlackRock submitted an S-1 registration statement for its iShares Bitcoin Trust, marking a pivotal moment in the evolution of crypto-based financial products. With over $2.4 trillion in ETF assets under management, BlackRock brings unmatched credibility and scale to the table. Simultaneously, Nasdaq filed a 19b-4 form with the SEC, requesting rule changes necessary to list and trade a spot Bitcoin ETF.
Historically, the SEC has rejected all 28 prior applications for spot Bitcoin ETFs, citing concerns over market manipulation, custody risks, and lack of investor protection. However, BlackRock’s near-perfect approval record—255 out of 256 ETFs approved—lends significant weight to this latest attempt.
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While no approval is guaranteed, market sentiment reacted strongly: Bitcoin surged more than 19% in the week following the announcement (data from WEEX shows BTC rose 10.28% on June 21 alone). The filing included a Surveillance Sharing Agreement (SSA) between Nasdaq and an unnamed cryptocurrency exchange—widely believed to be Coinbase—aimed at detecting fraud and manipulation. This addresses one of the SEC’s core objections and could be a game-changer.
Understanding the SEC Approval Process
The path to a spot Bitcoin ETF involves multiple regulatory steps, often misunderstood by investors.
Step 1: Filing the Registration Statement (S-1)
Unlike traditional ETFs that file under the 1940 Investment Company Act using Form N-1A, BlackRock used Form S-1 under the 1933 Securities Act. This distinction matters because it reflects a different legal framework and oversight model.
An existing precedent exists: Teucrium’s Bitcoin futures ETF was approved in April 2022 under the same 1933 Act framework, setting a potential blueprint for spot ETFs.
Step 2: Exchange Rule Change Proposal (19b-4)
For any new ETF to trade, the listing exchange must propose a rule change via Form 19b-4. In this case, Nasdaq filed to modify its rules to allow trading of a spot Bitcoin ETF. The SEC must approve this change before the product can launch.
Step 3: Federal Register Publication and Review Clock
A common misconception is that the review clock starts when the 19b-4 is filed. It does not.
The official 240-day review period begins only after the SEC publishes a notice of the proposed rule change in the Federal Register, the U.S. government’s official journal of rules and proposed regulations.
As of now, that publication has not occurred for BlackRock’s filing—meaning no formal deadline is yet in place. Once published, the SEC has up to four decision windows: 45 days, then another 45, followed by 90, and finally 60 days—totaling 240 days maximum.
During this time, the SEC may:
- Request additional information
- Delay decisions up to three times
- Approve or reject at any point
Even if delayed, rejection isn’t certain. Teucrium’s futures ETF survived multiple delays before eventual approval.
Ripple Effects on Other Crypto Financial Products
BlackRock’s entry has already reshaped the competitive landscape for other Bitcoin investment vehicles.
Grayscale Bitcoin Trust (GBTC): From Deep Discount to Narrowing Spread
Before BlackRock’s announcement, GBTC traded at a steep 43.8% discount to its net asset value (NAV)—a reflection of limited redemption options and waning investor confidence.
Following the news, GBTC’s discount narrowed to 31.6%, signaling renewed market optimism about a potential ETF conversion. If GBTC were approved as an ETF, its shares could be created and redeemed daily, aligning price closely with NAV.
Grayscale is currently suing the SEC over its denial of the conversion request. Oral arguments were heard in March, with a ruling expected by fall 2025. Either side may appeal, potentially extending the timeline further.
Ark 21Shares Bitcoin ETF: Re-entering the Race
Ark Invest and 21Shares recently resubmitted their spot Bitcoin ETF application with CBOE BZX Exchange. Their revised 19b-4 filing—published in the Federal Register on May 15, 2025—includes a surveillance-sharing agreement similar to BlackRock’s.
The SEC’s next response deadline for this application is August 13, possibly before it addresses BlackRock’s proposal. Given Ark’s first-mover advantage in re-filing with updated compliance measures, it remains a strong contender.
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Key Challenges Ahead
Despite momentum, hurdles remain:
- Regulatory clarity: The Wall Street Journal reported that the SEC has told applicants their SSAs lack sufficient detail.
- Market structure concerns: The SEC remains cautious about whether crypto markets are mature enough to prevent manipulation.
- Legal uncertainty: The outcome of Grayscale’s lawsuit could set a precedent affecting all pending applications.
Still, history suggests persistence pays off. The first Bitcoin futures ETF—ProShares’ BITO—now controls 93% of the $1.13 billion futures ETF market, demonstrating the “winner-takes-most” dynamic in ETF adoption.
Frequently Asked Questions (FAQ)
Q: What is a spot Bitcoin ETF?
A: A spot Bitcoin ETF directly holds actual Bitcoin rather than futures contracts or derivatives. Investors gain exposure to real-time Bitcoin prices without managing private keys.
Q: Why hasn't the SEC approved one yet?
A: The SEC has consistently cited risks of market manipulation, inadequate surveillance mechanisms, and custody challenges as reasons for rejecting previous applications.
Q: How does BlackRock’s SSA address these concerns?
A: The Surveillance Sharing Agreement enables Nasdaq to monitor trading activity on a major crypto exchange in real time, helping detect suspicious behavior—a critical step toward satisfying regulatory requirements.
Q: When will we know if BlackRock’s ETF is approved?
A: The earliest decision window opens roughly 45 days after the rule change proposal appears in the Federal Register—which hasn’t happened yet. Expect updates by late summer or early fall 2025.
Q: Will multiple spot Bitcoin ETFs be approved?
A: Possibly. While only one may dominate initially, regulators could approve several simultaneously, especially if they meet strict compliance standards.
Q: How does this affect Bitcoin’s price long-term?
A: Approval could unlock billions in institutional capital, increasing demand. Historical analogies include gold ETFs, which significantly boosted gold investment accessibility and liquidity.
Final Thoughts
BlackRock’s bid for a spot Bitcoin ETF represents more than just another regulatory filing—it's a catalyst reshaping investor expectations, competitive dynamics, and regulatory timelines.
While approval remains uncertain and the process methodical, the inclusion of robust surveillance frameworks and support from major financial institutions signals a turning point.
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Whether BlackRock succeeds or not, its application has already accelerated progress toward broader crypto adoption in traditional finance. For investors, developers, and regulators alike, the coming months will be critical in defining what institutional-grade digital asset access looks like in 2025 and beyond.
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