(Bloomberg) – In frenetic activity Friday afternoon, Fidelity Investments led a handful of firms to file a new batch of applications for a spot bitcoin exchange-traded fund to add new details after the U.S. Securities and Exchange Commission had pointed out that the initial submissions were inadequate.
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The companies — which also include Invesco, VanEck, 21Shares and WisdomTree — are among eight companies planning to launch a first line of U.S. spot bitcoin ETFs. BlackRock Inc. sparked a wave in mid-June with the surprise filing of one such fund.
All five who refiled on Friday indicated that Coinbase Global Inc. will conduct market surveillance to support their funds, a fact not considered in previous iterations.
Read more: SEC questions Fidelity and BlackRock on Bitcoin ETF filings
Monitoring the crypto market could be key to gaining SEC clearance for a spot bitcoin ETF. Monitoring can drastically reduce fraud and market manipulation, which have been the main reasons why the agency has so far rejected around 30 spot bitcoin ETF applications.
Coinbase is also willing to provide various services to the other proposed fund issuers, according to a person familiar with the matter who was not authorized to speak publicly about the deals. In addition to BlackRock, these companies include Valkyrie and Bitwise. In a recent filing, 21Shares said that Coinbase would also offer custody services. The other issuers declined to confirm whether Coinbase would be involved.
Digital asset fans are excited at the prospect of cryptocurrencies potentially becoming more accessible to regular investors, and the spate of filings has had a positive impact on token prices. Bitcoin bounced back above $30,000 in June, trading at its highest level in about a year. The token was trading at around $30,400 on Friday. That’s still less than half of the record high of nearly $69,000 set in November 2021.
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Of course, rule filings do not become effective until they are approved by the SEC.
Coinbase’s involvement in the proposed ETFs could result in an influx of revenue at a time when the crypto exchange industry is suffering from low volumes. Coinbase’s revenue last year was less than half of what it was in 2021, when the industry was in a bull market. The news also comes amid the battle with the SEC, which has accused Coinbase of operating an illegal exchange.
Following BlackRock’s filing for the ETF in mid-June, seven other firms have applied or re-applied for spot ETFs as the market is optimistic that the SEC will abandon its longstanding view that the funds should not be approved. In evidence of a partial thaw, the agency allowed ETFs tied to Bitcoin futures in 2021.
– With support from Katherine Doherty and Lydia Beyoud.
(Adds more background information and additional documentation from 21Shares.)
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