With digital assets entangled in regulation scrutiny, BlackRock filed for a bitcoin exchange-traded fund (ETF) on Thursday to expose more investors to cryptocurrency.

According to a filing with the Securities and Exchange Commission (SEC) and despite the U.S. regulator not approving any applications for spot bitcoin ETFs to date, BlackRock's iShares Bitcoin Trust will use Coinbase Custody as its custodian.

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The firm, run by CEO Larry Fink, is one of the world's largest asset managers with about $9 trillion in assets under management. 

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Meanwhile, the price of bitcoin dipped as low as the $25,000 level, while other digital assets tumbled after the Federal Reserve announced Wednesday that additional interest rate hikes were coming. 

Earlier this month, the SEC sued major exchanges Coinbase and Binance in high-profile lawsuits that reverberated throughout the digital assets industry.

Proponents say an ETF would give investors exposure to bitcoin without directly buying it, while a spot bitcoin ETF would track bitcoin's underlying market price. 

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The SEC rejected Grayscale Investment LLC’s application last year to convert its flagship spot Grayscale Bitcoin Trust (GBTC.PK) into an ETF.

Grayscale sued the SEC in response, claiming that the regulator was acting arbitrarily in rejecting applications for spot bitcoin ETFs when it had previously approved bitcoin futures ETFs.

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The SEC has also rejected proposals for spot bitcoin ETFs from firms including Fidelity, Cboe Global Markets and NYDIG.

Reuters contributed to this report.