BlockFi files for physically-backed Bitcoin ETF with SEC

The crypto lending firm has already filed paperwork with the SEC to launch its physically-backed BTC EFT, named BlockFi NB Bitcoin ETF. It has raised hopes that the BTC price could witness another rally this week. 

BlockFi, the renowned cryptocurrency lending firm, has asked for permission from the SEC (United States Securities and Exchange Commission) to launch an ETF (Exchange Traded Fund) that is physically backed by Bitcoin (BTC). The crypto lending firm has already filed paperwork with the SEC to launch its physically-backed BTC EFT, named BlockFi NB Bitcoin ETF. It has raised hopes that the BTC price could witness another rally this week. 

Official documents show that the cryptocurrency lending firm has filed Form S-1 for BlockFi NB Bitcoin ETF and submitted it to the SEC on Monday. According to the filing, the investment objective of the physically-backed Bitcoin ETF will be to reflect the performance of the underlying Bitcoin (BTC) asset. 

The earlier BTC ETFs approved by the SEC used Bitcoin futures or derivatives as benchmarks. If approved, the BlockFi NB Bitcoin ETF will reflect the underlying performance of Bitcoin in the spot market. Both the SEC-approved Bitcoin ETFs now being traded in the market are futures-based products. ProShares' Bitcoin Strategy ETF and Valkyrie’s Bitcoin Strategy ETF are linked to BTC Futures and not the BTC spot market price.

In the SEC filing, BlockFi further said:

The trust will not purchase or sell bitcoin directly, although the Trust may direct the Custodian to sell bitcoin to pay for certain expenses."

There is widespread speculation that the securities watchdog in the USA may approve its first-ever physical Bitcoin ETF as early as this week. Reports say that the SEC’s decision to approve the physically-backed VanEck spot Bitcoin ETF is due on Sunday. Bloomberg’s James Seyffart has said: "It will be either approval or denial from the SEC... no more delays."

Since the approval of BTC-based ETFs in early October, institutional investors have bought over US$2 billion worth of Bitcoin products by October's end. Analysts and traders believe that the quantum of institutional investment will increase by leaps and bounds if the SEC approves the physically-backed Bitcoin ETF on Sunday.