Bitrabo Editorial
The world’s largest asset manager, BlackRock, has filed an application for a Bitcoin spot ETF with the US Securities and Exchange Commission (SEC). Despite the SEC lawsuit, BlackRock has chosen Coinbase for custody and market price data. While this news is positive for the BTC price, the community is debating whether BlackRock entering the Bitcoin market is a good or bad thing.
A Bitcoin spot ETF has long been seen as a game-changer for attracting significant capital to Bitcoin in the US. However, various asset managers have faced hurdles when trying to get approval from the SEC for Bitcoin spot ETFs.
The SEC however has a long history of denying spot ETFs citing concerns about market manipulation and the lack of a surveillance-sharing agreement between a “regulated market of significant size” and a regulated exchange
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— thiccy (@thiccythot_) June 16, 2023
What Are The Chances For A BlackRock Spot ETF?
Unlike existing future-based ETFs in the US that settle in cash, a spot ETF settlement involves “real” Bitcoin and can attract significant inflows. Market analyst Joe Consorti believes that this could open the floodgates for institutional liquidity. Consorti also notes that BlackRock, with its strong reputation and political connections, has the highest likelihood of getting a spot ETF approved compared to previous attempts.
SEC Chairman Gary Gensler, however, faces challenges with BlackRock’s application at this particular time. Rejecting BlackRock could be more difficult for Gensler and may not be politically wise for the agency.
BlackRock’s partnership with Coinbase adds an interesting twist. While it may make Gensler uneasy, the application for a Bitcoin spot ETF has perhaps never had a greater chance of attracting institutional capital.
Good Or Bad For Bitcoin?
Despite the potential money inflows, there are critical voices within the community. BlackRock is viewed as the “enemy” by some. Analyst Pentoshi highlights how opinions have changed about BlackRock entering the industry:
Everyone before: We hate blackrock, we hate the suits, screw the system, they are frauds
Everyone down 99%: Wow blackrock is getting in. This is great! In 2 years I might only be down 90%!
Analyst and co-founder of Reflexivity Research, Will Clemente, argues that if BlackRock gets SEC approval, it could be part of an orchestrated effort to control Bitcoin/crypto by driving out domestic crypto companies and bringing in traditional companies aligned with the US government.
Bitcoin educator Anil (@anilsaidso) has found an interesting detail in BlackRock’s ETF submission. The document reveals that BlackRock has the discretion to choose a suitable network in the event of a hard fork, without necessarily selecting the most valuable fork.
It is uncertain when the SEC will decide on the application, as they have a maximum of 240 days. If they follow recent trends, a decision may come in mid-February 2024, just one month before the Bitcoin Halving.
At the time of writing, the BTC price is $25,552, having recaptured the 200-day EMA (blue line).
Featured image from Reuters, chart from TradingView.com