On June 15, 2023, BlackRock’s application for SEC approval of a spot Bitcoin ETF set a pivotal precedent, inspiring numerous other financial institutions to follow suit and resubmit their own applications for similar offerings.
The first part of this article Bitcoin ETF: Its Journey Ahead, provides a comprehensive overview of BlackRock, Howey Theory, the SEC, and the fascinating developments surrounding BTC. Make sure to check out our first article to get up to speed before reading further into this one for a better understanding.
BlackRock, the world’s largest asset manager, has made a groundbreaking move by joining the race to launch the very first Spot Bitcoin Exchange-Traded Fund (ETF) in the United States. This exciting development means that investors can get involved with the world’s oldest and largest cryptocurrency without owning it.
Instead, they can purchase shares that mirror its price, providing an opportunity to reap the benefits without the hassle of storage or security concerns. BlackRock’s ETF will utilize Coinbase Custody for the ETF and rely on the exchange’s spot market data for accurate pricing, while BNY Mellon will serve as the trusted cash custodian. This leap forward by Blackrock is particularly significant as it’s been a decade since the first filing for a potential spot bitcoin ETF, with every past application rejected by the SEC.
Last year, BlackRock’s decision to embrace Bitcoin Futures in its investment strategy made waves, especially after CEO Larry Fink expressed a positive outlook on the pioneering digital currency. While recognizing its potential to replace gold. However, he also cautioned about its growing popularity and the impact it could have on the US dollar. With BlackRock’s entry into the market, the world of cryptocurrency is poised for a new era of accessibility and investment opportunities.
Unveiling the Puppet Master: Does BlackRock Control the World?
With astonishing statistics and an unparalleled global influence, it is no wonder people accuse BlackRock of controlling the world. According to Oxfam Research, 82% of earned money in 2017 went to the wealthiest 1%. 1
As one of the Big Three passive fund asset management firms, alongside Vanguard, and State Street, it is no wonder they dominate the financial landscape. Their combined managed assets of $10 trillion surpass the most valuable companies in the S&P 500, rivaling the GDP of all but two countries.
Known as “The fourth branch of Government,” BlackRock collaborates closely with Central Banks and played a pivotal role in navigating the 2008 housing crisis. With their cutting-edge trading algorithm, Aladdin, overseeing a staggering $21.6 trillion in assets, BlackRock is shaping the world economy like never before2.
Will BlackRock’s ETF Usher in a New Era for Bitcoin?
Imagine, the largest cryptocurrency, Bitcoin, with a whopping market value of $510 billion, in the hands of a $10 trillion giant, that is already suspected by many as “controlling the world.”
Interestingly, market researchers have a different perspective. They believe that if the Securities and Exchange Commission (SEC) approves BlackRock’s Bitcoin Spot ETF, it could potentially trigger a significant surge in Bitcoin’s price.
This approval would open doors for risk-averse investors, who have been hesitant to invest directly in the high-risk cryptocurrency.
Considering the recent setbacks the crypto industry faces, such as investor confidence waning and intensified regulatory scrutiny, this news comes as a breath of fresh air. Throughout 2022, numerous prominent crypto companies crumbled, resulting in significant financial losses for investors.
However, BlackRock’s entry into the Bitcoin market might revive trust and renewed interest from institutional investors.
Industry insiders have reported a surge in interest following BlackRock’s filing. At Genesis Trading, a prominent crypto broker, numerous top-tier clients have already increased their exposure to Bitcoin. This demonstrates the potential impact a Bitcoin Spot ETF could have, as it allows institutional investors to easily invest in Bitcoin without the complexities of direct ownership. Imagine the possibilities! With BlackRock’s expertise and massive influence, the world of cryptocurrencies is about to experience a paradigm shift. This development has the potential to attract a wave of new investors, diversify portfolios, and drive the entire crypto market to extraordinary heights.
Catalysts for BlackRock ETF Approval
Due to two key factors, BlackRock’s recent filing on the ETF holds significant promise.
Firstly, BlackRock has established a surveillance agreement between Coinbase, a major cryptocurrency exchange, and NASDAQ’s proven surveillance technology. This agreement satisfies the ETF rules, which stress the importance of monitoring a venue where the underlying asset trades. By leveraging NASDAQ’s surveillance technology and Coinbase’s substantial size, BlackRock demonstrates its proactive approach to regulatory concerns. Secondly, the regulatory environment surrounding Bitcoin plays a crucial role in supporting the approval of the BlackRock ETF. Both the SEC and the Commodity Futures Trading Commission (CFTC) recognize Bitcoin as a commodity rather than a security. With Coinbase providing data on Bitcoin trading to NASDAQ, the involvement of a reputable exchange adds credibility to the case for approval. NASDAQ’s surveillance system further enables regulators to monitor the underlying asset trades and the ETF, ensuring compliance with regulatory obligations3.
- Oxfam: https://www.oxfam.org[↩]
- Coindesk tech: https://www.coindesk.com/tech[↩]
- Economictimes: https://economictimes.indiatimes.com/markets/cryptocurrency[↩]
