Former BlackRock MD Sees Shift in Sentiment Towards Spot Bitcoin ETF
[TL; DR]
The SEC is likely to approve several crypto ETFs within the next three months.
The approval of crypto ETFs may increase investment in cryptocurrencies.
The US SEC’s delay to approve Bitcoin ETFs is not a sign of its rejection of crypto ETFs.
Introduction
Many changes are taking place in the crypto space with more products coming onto the market. Recently, we have seen the financial market’s growing interest in crypto exchange traded funds (ETFs). As a result, several companies are seeking the approval of crypto ETFS such as Bitcoin ETFs and ETH ETFs. This post looks at the possibility of BTC ETF approvals in the United States.
BlackRock and Other Companies Await SEC Decision on BTC ETFs
BlackRock and other financial asset management companies like VanEck, Invesco Galaxy, Bitwise, WiseOrigin and Valkyrie are waiting for the approval of their ETFs. Unfortunately, the United States Securities and Exchange Commission has delayed announcing its decision on several applications for the bitcoin exchange traded funds (ETFs).
Read also: BlackRock’s ETF Filing Sparkle Bullish Sentiments, Bitcoin Shorts lose $16 M
The main reason for the delay in announcing the outcome of the BTC ETF applications is to have more time to assess some proposed changes in rules governing them. The SEC said, “The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.”
The proposed changes to the rules that govern the approval or disapproval of crypto ETFs like spot bitcoin ETF market were published on 19 July 2023. The public is expected to give its input on the new legal guidelines.
Crypto Experts Believe the SEC will Approve Spot Bitcoin ETFs
The former managing director at BlackRock, Steven Schoenfield, believes that the SEC is likely to approve several crypto ETFs like bitcoin ETFs within the next three months.
Schoenfield, who is also CEO of MarketVector Indexes, told the attendants at the Digital Asset Summit in London that if the SEC approves ETF applications, they are likely to generate more than $200 billion.
Schoenfield came up with various propositions of how the SEC is likely to handle the BTC ETFs. For example, he said, “The SEC will probably approve [all spot bitcoin ETF applications] at the same time; I don’t think they want to give anybody a first mover advantage.”
On the other hand, Schoenfield said that the SEC’s delay in approving the BlackRock crypto ETF and the rest is normal as the regulatory body is taking its time to make assessments. The good and positive thing is that the SEC has not disapproved of the BTC ETF applications.
Read also: Crypto Influencers Fuel Speculation as SEC Delays Bitcoin ETF Decision
Shoenfield added, “Instead of completely rejecting the whole list, they’ve asked for comments, which is a marginal but significant improvement in the dialogue.”
Tim Bevan, CEO at ETC Group, shares the same bitcoin sentiment and looks forward to the approval of various crypto ETFs. He said, “We don’t believe the SEC will act as kingmaker and the most likely outcome is a block approval of applications that meet requirements, probably in Q1 ‘24.”
According to Bevan, the SEC is likely to approve several crypto ETFs which will result in a large spot bitcoin ETF market within a short period. The fact that last month four congressional representatives urged the SEC to approve bitcoin ETFs increases the probability that we will soon have some bitcoin EFTs on the market.
However, Schoenfield does not think that BlackRock will have an advantage over the other spot bitcoin applicants. He stated, “As much as BlackRock will try to crush the competition, there’s a good half dozen, maybe eight or nine, other firms deeply committed to tradable digital assets.”
He added, “They’ve all got applications in and some are actually much closer to the crypto eco than BlackRock. So, I think BlackRock will be in for quite a fight. “The SEC will probably approve [all applications for ETFs] at the same time; I don’t think they want to give anybody a first mover advantage.”
BlackRock Experienced a Shift in Bitcoin Sentiment
According to Bednall, a former managing director at BlackRock, there has been much change in the asset management sector in the last few years. He clearly said that there was a great shift at BlackRock on how it views bitcoin and the related products like ETFs.
For a long time, the current CEO at BlackRock, Larry Fink was not interested in cryptocurrencies like bitcoin. Fink used to view bitcoin as a tool for committing illegal financial activities. Now, the fact that BlackRock has applied for the spot bitcoin ETF in the United States shows Fink’s change of heart on cryptocurrencies.
Since many investors are bullish about bitcoin and crypto ETFs, BlackRock has found it most appropriate to introduce such financial products.
Bednall said, “Blackrock has very much changed its tune over the years, from Bitcoin being an index for money laundering, to him saying, it’s a global asset in the form of digital gold. So, that’s taken some time to get there.”
Bednall also thinks that BlackRock is in touch with very knowledgeable people in the crypto and financial sector as well as United States regulators. This is a reason why the SEC is likely to approve its bitcoin ETF.
Notably, Bednall commented, “I’d say that BlackRock is very close to regulators around the world, as well. They have a big team in their regulatory arm, and talk often to the regulators. So, they must be getting soundings, there. So that again is an indication of the mood music changing, and the SEC getting closer to approving one of these? Because otherwise, BlackRock wouldn’t have bothered.”
More interestingly, Fink has said that he now believes in cryptocurrencies and related financial products. In a recent interview with Fox News he said, “Crypto is digitising gold in many ways. ETFs were a big revolution for the mutual fund industry and they are really taking over the mutual fund industry.”
Fink also indicated his Optimism that BlackRock’s BTC ETF application will be approved sooner or later. He commented, “We hope, like the past, we can work with our regulators and get this filing approved one day. I have no idea when this one day will be.”
He added, “I cannot get into any specifics but…we work really closely with our regulators and we want to hear what their issues are and how we can fix those.”
Possible Outcomes of Bitcoin ETF Applications
As hinted above, the SEC extended the review period for Bitcoin ETFs to check for any possibilities of the misuse of the product when it is approved. In fact, the SEC is carrying out simultaneous assessment of the different ETFs, including that of Fidelity and BlackRock.
The SEC’s assessment effort may also indicate a high likelihood that it may approve several bitcoin ETF at the same time. To this effect, Bednall said, “I think the SEC will probably approve all the applications at the same time. I don’t think they’re going to want to give anybody a first-mover advantage.”
Eric Balchunas, a Bloomberg’s Senior ETF Analyst, supports Bednall’s view. He said, “The fact that the SEC is actively engaging with spot bitcoin issuers on their current applications — which hasn’t ever happened before — we think a rejection is unlikely and holds a 75% chance of approval by the end of this year.”
In the meantime, some crypto analysts have predicted that the ETF approval is likely to have a big impact on the price of bitcoin. This is because their approvals may attract traditional financial investors to gain exposure to Bitcoin price which may increase its upward momentum.
News In Brief
The crypto market is focused on the BlackRock news as it has a significant impact on the prices of many cryptocurrencies.
BlackRock’s Ambitious ETF Expansion Campaign and Product Diversification
BlackRock is expanding its presence in the financial sector by increasing its products. The financial asset management firm is looking forward to the approval of its bitcoin ETF in the near future. The SEC’s delay of its decision on BTC ETFs should not sound as a “BlackRock scandal” as ETF approval may take place soon.
Apart from the anticipated bitcoin ETF, BlackRock is set to introduce the Advantage Large Cap Income ETF BALI which will sell call options through the S&P 500 index. Interestingly, last year BlackRock also introduced its bond ETFs which expanded the range of its investment products.
SEC Extended the Review Period of Spot Bitcoin ETF Applications
The US Securities and Exchange Commission has postponed its decision on ETF approval of various asset management firms including Valkyrie, BlackRock and Bitwise. The regulatory authority aims to ensure that there will not be any possibility of manipulative practices in the ETF market.
Conclusion
The US Securities and Exchange Commission has delayed its decision on the ETF applications which the leading asset management firms including Valkyrie, BlackRock and Bitwise have made. The crypto market has also noted a shift in the appreciation of cryptocurrency by firms like BlackRock that used to shun them. Already, the financial asset management sector is waiting for the SEC’s approval of several spot bitcoin ETFs.
FAQs about Bitcoin ETFs
Will bitcoin be approved?
Many experts believe that the United States SEC will approve several bitcoin ETFs within the next three months. The SEC has delayed its decision on bitcoin ETFs because it wants to carry further assessments to ensure there will not be market manipulative practices.
Does BlackRock offer crypto?
BlackRock does not offer crypto products or services. It is a traditional asset management firm that offers legacy financial investment instruments. Recently, BlackRock applied to offer a bitcoin ETF.
Does BlackRock own XRP?
Currently, BlackRock does not own XRP coins. Its main role is to offer traditional financial assets which include consulting services, iShares ETFs and investment management technology.
What does BlackRock support?
BlackRock is an asset management firm that offers various traditional investment products and services such as consulting services, iShares ETFs and investment management technology. Both institutional and retail investors can access its products and services.
How will BlackRock affect crypto?
BlackRock intends to introduce crypto exchange traded funds like Bitcoin ETF. If the SEC approves its BTC ETF application it will give the investors the opportunity to indirectly invest in bitcoin. This may result in the increase in bitcoin price.
