BlackRock’s ETF success rate with the SEC is 575 to 1, what about its Bitcoin app?

The world’s largest asset manager took a big step towards its involvement in the cryptocurrency industry this week by filing a Bitcoin Spot ETF with the United States Securities and Exchange Commission.

With so many previous applications for such a product by other companies having failed before, the community wondered if BlackRock’s attempt seemed doomed from the start. However, the juggernaut’s success rate with the SEC has been pretty unparalleled so far.

History to repeat But for which side?

The COVID-19 pandemic, subsequent central bank monetary policies, and BTC price surge in 2020 and 2021 have changed the game in ways that very few have had the courage to consider before. this moment. Many institutions have started to take a more serious look at the cryptocurrency industry, and BTC in particular.

Back then, it was almost expected that a new institution or individual legacy investor would announce their purchase of bitcoins on a weekly basis. BlackRock, despite its hesitation at first, started with minor investments through CME, as well as encouraging comments from some of its executives.

While many institutions pulled back during the 2022 bear market, especially following the noisy meltdowns of the Terra ecosystem and FTX, BlackRock doubled down with a few additional initiatives, including a Blockchain ETF in Europe.

In June 2023, however, the giant made its biggest bet on the industry by depositing a Bitcoin Spot ETF in the United States alongside Coinbase, which will be the custodian of the funds.

This move had an immediate positive effect on BTC and its price, which jumped over $2,000 in the first few days after the deposit. The long-term consequences could be even more beneficial for the whole industry if this ETF is approved.

According for Eric Balchunas – Bloomberg’s senior ETF analyst – the odds are pretty high, at least historically speaking. BlackRock has an astonishing success rate when it comes to its ETF applications with SEC – 575 approved against only one rejected.

Moreover, the Commission would have rejected this application for an actively managed ETF because it did not require participants to disclose their holdings on a daily basis.

BlackRock building.  Source: FT
BlackRock building. Source: FT

What about the BTC ETF in the US?

While the SEC has given the green light to a few Bitcoin Futures ETFs, it has rejected countless applications for Spot ETFs. In fact, the endless denials have prompted Grayscale, which is trying to convert its flagship BTC into an exchange-traded fund, to sue the securities regulator.

The agency’s justification has always been the same, saying the proposed ETFs do not demonstrate how they will prevent market manipulation and fraud.

Additionally, the SEC has now gone after several crypto exchanges and tokens, alleging that most of the assets are unregistered securities. Nonetheless, even its skeptical chairman – Gary Gensler – has admitted in the past that BTC is a commodity.

Either way, BlackRock’s timing is quite intriguing, given the SEC’s overall negative stance toward the industry. Being one of the most influential financial players, however, it begs the question whether BlackRock knows something we don’t know that will help it continue with its spectacular success rate or if it will register its second L( bones).


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