BlackRock’s Bitcoin ETF May Get the Green Light: Here’s Why
If the Securities and Exchange Commission (SEC) greenlights the Bitcoin ETF application from BlackRock, the world’s leading investment company with a staggering $10 trillion under management, it could result in a considerable surge in Bitcoin’s value and consequently elevate the entire cryptocurrency market.
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Given the volatile nature of the crypto industry, and the SEC's perceived efforts to constrain it, how likely is it that this development will materialize? The scenario isn't as bleak as it initially appears. Here are a few reasons why there could be a favorable outcome.
The SEC's Distinctive Attitude towards Bitcoin
Contrary to popular belief, the SEC doesn't adopt an uncompromising stance towards all cryptocurrencies. The head of this regulatory body, Gary Gensler, considers Bitcoin to be a commodity rather than a security, a sentiment he has repeatedly expressed in various interviews.
Moreover, there are already Bitcoin ETFs in the US. These include offerings from Grayscale, ProShares, Valkyrie, Bitwise, and VanEck. The SEC even recently approved the first leveraged futures Bitcoin ETF.
A Glimmer of Hope
It's important to note that recent registration applications submitted via Nasdaq and Cboe Global Markets were rejected by the SEC, not outright, but for further refinement.
These applications were returned to their respective companies because those entities failed to identify a spot Bitcoin exchange with which they were expected to establish a joint surveillance agreement. Thus, the concerns were relatively minor.
BlackRock, Fidelity, WisdomTree, and others have already re-submitted their applications, naming Coinbase as their partner in a custodial agreement.
Special Considerations
An essential facet of BlackRock's application is the Surveillance-Sharing Agreement (SSA), which carries unique features. The standard SSA protocol anticipates that the exchange will share data concerning suspicious operations with regulators and ETF providers.
According to CoinDesk, the distinct feature of the new agreement is that the regulator or ETF provider can request data from the exchange as required. This could include specific commercial, trading, or even personal information, such as a name or address.
This element could potentially sway the SEC's decision in favour of approving BlackRock's spot Bitcoin ETF.
Astounding Statistics
The stats for BlackRock's ETF registration applications paint a positive picture for those in the crypto community. Of the 576 applications submitted previously, only one was rejected. Considering this track record, BlackRock seems to have a good rapport with the SEC, which increases the odds quite a bit.
Insights from Analysts
Eric Balchunas, a senior ETF analyst from Bloomberg, suggests that BlackRock stands a 50-50 chance of getting its spot Bitcoin ETF approved.
Meanwhile, analysts at the brokerage company Bernstein, as well as the experts from JPMorgan, America's largest banking institution, believe the likelihood of approval is high.
However, JPMorgan has mentioned that even if approved, it might not have a significant impact on the crypto market. They reference the lukewarm interest from investors in the existing Bitcoin spot ETFs in Canada and Europe.
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