Who are the players racing for a spot Bitcoin ETF?

The past few weeks have seen back to back applications from companies to offer Bitcoin Exchange-traded funds (ETFs).

And this week, the US Securities and Exchange Commission is due to begin considering several of the applications for either approval or rejection.

Let’s take a quick recap of the companies that have applied to offer these ETFs, and what they do.

1. Bitwise

Based in San Francisco, Bitwise is a crypto asset manager, and helps clients invest money into various cryptocurrency products. Their current offerings include crypto-focused equity and futures ETFs, as well as cryptocurrencies like Bitcoin and Ethereum. They also invest in other crypto-based products like NFTs.

Recently, the company announced that one of its other ETFs, the Crypto Industry Innovators ETF, had just surpassed US$100M in crypto assets under management. This particular ETF tracks an index designed by Bitwise that consists of leading companies driving the crypto economy.

The company’s current application for a Bitcoin ETF is not its first. Bitwise first applied for a spot Bitcoin ETF in October 2021, but later amended and refiled their application in June this year.

2. BlackRock

Blackrock’s spot ETF application was probably the most significant of the lot- and for good reason.

Blackrock is currently the world’s largest asset manager, with over US$8.59 trillion in assets under management. The company operates globally, with 70 offices in 30 countries, and clients in over 100 countries. It is also one of the Big Three index fund managers, alongside Vanguard and State Street Global Advisors.

Yet, Blackrock’s Bitcoin ETF came as a bit of a surprise for many. Blackrock CEO Larry Fink had previously been sceptical of the crypto industry, suggesting that crypto was heavily used for ‘illicit activities’. However, after Blackrock filed for a Bitcoin ETF, Fink changed his tune on crypto, suggesting that it could revolutionise finance.

Blackrock’s ETF filing triggered a wave of applications from other companies, including from the aforementioned Bitwise.

Bitwise's Chief Investment Officer, Matthew Hougan, emphasized the importance of BlackRock's move, stating, “You have to listen when Blackrock comes to the market, because they're the largest ETF issuer in the world, they are very careful and connected."

3. Fidelity

Fidelity’s application is the most recent, having been submitted just this week. The company is working with exchange operator Cboe Global Markets as their asset manager. Cboe has also partnered with Coinbase to leverage Coinbase’s expertise and resources to address regulatory concerns and promote market integrity.

While Fidelity’s Bitcoin ETF filing didn’t raise as many eyebrows as Blackrock’s, the news is still significant- the company also has a significant amount of assets under management, and has traditionally only been involved in traditional finance. Their application for a Bitcoin ETF may be a signal that more players from traditional finance are giving crypto their vote of confidence as well.

4. WisdomTree

WisdomTree’s spot Bitcoin ETF was also filed hot on the heels of Blackrock’s filing, and like Bitwise’s filing, this filing is not the first from WisdomTree.

Wisdomtree had previously filed applications in 2021 and 2022, but both were rejected by the SEC for failing to protect investors and the public interest.

Since those rejections, however, WisdomTree has supposedly been busy in Europe, and is now confident that the SEC will approve this latest application.

According to WisdomTree’s global chief investment officer Jeremy Schwartz, WisdomTree has “been able to successfully launch products in Europe… European regulators have been more friendly, and they’ve been able to get comfortable with the mechanisms, the custodians, and how the markets work.”

Schwartz hopes that since the new filings now include data sharing agreements and surveillance sharing, the SEC’s concerns on market manipulation will be addressed.

5. VanEck

Another company that has filed for a Bitcoin ETF is Van Eck, based in New York. The company currently has around US$61 billion in assets under management.

The company has also previously filed applications for a Bitcoin ETF, though none of them have been successful. This latest application comes just eight months after its last attempt.

6. Invesco

An investment management company with US$1.4 trillion assets under management, Invesco is now applying for a spot Bitcoin ETF in conjunction with Galaxy Digital.

These two companies had previously teamed up to filed a Bitcoin ETF in 2021. Invesco had also applied for a Bitcoin futures ETF that year, but dropped the effort after a futures ETF by ProShares was approved and began trading first.

The current filing, however, presents an interesting argument for why the SEC should approve a spot Bitcoin ETF. Invesco argues that a lack of such an ETF pushes investors towards riskier alternatives, as seen in insolvencies like FTX and Celsius.