The rumor has come true: the world’s largest asset manager, BlackRock, has filed for a Bitcoin spot ETF with the United States Securities and Exchange Commission (SEC). For custody data and market pricing, BlackRock chooses Coinbase, despite SEC lawsuit. And while the news looks overwhelmingly bullish for the BTC price, the community is wondering if BlackRock’s entry into Bitcoin is good or bad.
For many years, a bitcoin spot ETF was considered the holy grail for bitcoin in the United States for attracting huge amounts of new capital. So far, various asset managers have cut their teeth at the SEC when it comes to Bitcoin spot ETFs.
The SEC, however, has a long history of denying cash ETFs citing concerns about market manipulation and the lack of an agreement to share oversight between a “significantly sized regulated market” and a regulated exchange.
— thiccy (@thiccythot_) June 16, 2023
What are the odds of a BlackRock Cash ETF?
Although there are already ETFs based on futures contracts in the United States, these do not require the settlement of “real” Bitcoin, as they are simply settled in cash. A spot ETF, on the other hand, promises large inflows. As Joe Consorti, a market analyst at The Bitcoin Layer, explains, the “gates of institutional liquidity” may finally be opening.
Therefore, everyone wants to be the first to get SEC approval, as was the case with gold in 2004. And given its reputation, BlackRock has the “greater probability” of any previous attempt. to get approval for a spot ETF, as Consorti notes. . BlackRock is the most powerful and politically connected asset manager in the world.
Obviously, it will make a difference whether the Winklevoss twins or Grayscale apply for a spot ETF or the world’s largest asset manager, led by Larry Fink. For SEC Chairman Gary Gensler, however, the candidacy comes at the worst possible time.
A refusal from BlackRock is also likely to be more difficult for Gensler. Playing with Blackrock and incurring even more trouble due to the flimsy justification for a rejection of the Bitcoin ETF would not be politically smart for the agency.
BlackRock’s partnership with Coinbase is an interesting point, however, which may cause Gensler to sweat. Nonetheless, a bitcoin spot ETF app has probably never had such a chance of “opening” the floodgates for institutional capital.
Good or Bad for Bitcoin?
In addition to the money inflows, the critical voices of the community are nevertheless increasing, also because BlackRock is in fact the so-called “enemy”. The famous analyst Pentoshi writing:
Everyone before: We hate blackrock, we hate costumes, screw the system, they’re crooks
Everyone 99%: Wow, Blackrock comes in. It’s awesome ! In 2 years, I may only have lost 90%!
Reflexivity Research analyst and co-founder Will Clemente, meanwhile, says it’s “undeniable” that Operation Chokepoint 2.0 was orchestrated when BlackRock “to hunt national crypto firms and bring in big mainstream corporations friendly to the US government to try to control bitcoin/crypto” if BlackRock gets SEC approval.
Bitcoin educator Anil (@anilsaidso) reviewed BlackRock’s ETF application and found a “hidden gem” in the ETF submission. According to the document, in the event of a hard fork, BlackRock has the discretion to decide which network it deems appropriate. Moreover, there is no guarantee that BlackRock will choose the fork that will ultimately have the most value.
— Anil ⚡ (@anilsaidso) June 15, 2023
It’s unclear when the SEC will rule on the request. The SEC has up to 240 days to make a decision and has consistently exhausted that time in recent years. If so, a decision would come in mid-February 2024, remarkably just a month before the Bitcoin Halving.
At press time, the price of BTC stood at $25,552, retracing the 200-day EMA (blue line).
Featured image from Reuters, chart from TradingView.com