Approval of BlackRock's Bitcoin Spot ETF: What to Expect?
In June 2023, BlackRock applied for a Bitcoin ETF on the NYSE, awaiting SEC approval in 2024. What you need to know about this subject is here!
BlackRock, the world's largest asset manager, filed for registration of a Bitcoin ETF in June 2023. The ETF, named iShares Spot Bitcoin ETF, would be traded on the New York Stock Exchange (NYSE) and would track the price of Bitcoin.
The U.S. Securities and Exchange Commission (SEC) is responsible for approving or denying ETF registration requests. The approval process includes a review of the ETF's documentation, a public hearing, and a vote by the SEC board.
In October 2023, the agency received a series of public comments on BlackRock's request and has since been evaluating these comments, with a decision expected at some point in 2024. However, there is hope in the market that the decision might come in 2023.
This expectation grew after the SEC decided not to appeal a favorable court decision for Grayscale, another company seeking to convert its Bitcoin ETF, the Trust (GBTC), into a spot ETF. The SEC had initially rejected Grayscale's request, citing the volatility and inefficiency of the Bitcoin market. However, the District of Columbia Court of Appeals ruled that the SEC had not provided sufficient justification for its decision. The SEC's decision not to appeal suggests it may be more open to approving spot Bitcoin ETFs.
What could influence the SEC's decision?
The SEC has several concerns about cryptocurrency ETFs, including the volatility of the Bitcoin market and the potential for cryptocurrency ETFs to be used for speculation.
Nonetheless, approval of BlackRock's Bitcoin ETF is a real possibility.
BlackRock is a highly reputable company with a successful history of launching ETFs. Furthermore, the SEC has approved ETFs tracking Bitcoin futures, indicating a growing willingness to accept this type of fund.
However, approval is not guaranteed, as the SEC may decide that the risks outweigh the benefits.
Fake News about Bitcoin ETF Approval
On the morning of October 16, 2023, false news about the alleged approval of BlackRock's Bitcoin ETF circulated on Twitter. The news, published on the Cointelegraph profile, claimed that the SEC had approved BlackRock's request to launch a spot Bitcoin ETF.
The news quickly spread on Twitter, leading to a 10% increase in the price of Bitcoin. However, BlackRock itself debunked the news, stating that their request was still under review by the SEC.
Cointelegraph also refuted the news, stating that the information had been published in error. According to the website, the news was based on an unconfirmed screenshot posted by a former Twitter user, claiming to be from the Bloomberg Terminal.
This fake news is an example of how false information can have a significant impact on the market. The news led to a substantial increase in the price of Bitcoin, even though it was not true.
What Will Happen if the ETF Is Approved?
The approval of BlackRock's first Bitcoin spot ETF would be a significant step in legitimizing the cryptocurrency market. It would be the first fund with these characteristics approved in the United States. The ETF would also open up the Bitcoin market to a broader range of investors, potentially leading to increased demand and the asset's price.
SEC-Approved Bitcoin Futures ETFs:
ProShares Bitcoin Strategy ETF (BITO): Launched in October 2021, BITO is the first Bitcoin futures ETF approved in the United States. It tracks the price of a Bitcoin futures contract traded on the Chicago Mercantile Exchange (CME).
VanEck Bitcoin Strategy ETF (XBTF): Launched in November 2021, XBTF is a Bitcoin ETF that tracks the price of a Bitcoin futures contract traded on the CME.
In addition to these two, two more ETFs tracking Bitcoin futures traded on the CME have been approved:
Invesco Bitcoin Strategy ETF (BITW): Launched in December 2021, BITW is another Bitcoin ETF that tracks the price of a Bitcoin futures contract traded on the CME.
Teucrium Bitcoin ETF (BTCU): Launched in December 2021, BTCU is also a Bitcoin ETF that tracks the price of a Bitcoin futures contract traded on the CME.