Blackrock’s Bitcoin ETF Application Fuels Market Speculation

Client demand for cryptocurrency is increasing, as noted by Larry Fink, CEO of BlackRock Inc., during a recent interview on Fox Business. This surge in interest coincides with speculation regarding the SEC’s potential approval of BlackRock’s iShares spot ETF, which has caused Bitcoin’s price to rise from $27,900 to $30,000. Initially skeptical about cryptocurrencies due to concerns over illegal activities, Fink now views Bitcoin as a possible transformative force in the financial sector.

The SEC is currently evaluating multiple applications for spot Bitcoin ETFs from various firms, including BlackRock, Valkyrie, VanEck, Bitwise, and WisdomTree. In BlackRock’s application, Coinbase is designated as the custodian. Analysts, including those from Bloomberg, predict a strong chance that the SEC will approve a spot Bitcoin ETF this year, especially following Grayscale’s recent legal victory over the SEC regarding its conversion of the GBTC into a spot Bitcoin ETF.

On the same day the anticipated Bitcoin ETF launch generated considerable excitement, it provided a regulated means to exploit Bitcoin’s price swings without requiring direct ownership of the cryptocurrency. On October 16, 2023, Bitcoin’s price temporarily surpassed $30,000 due to erroneous rumors claiming that BlackRock’s iShares Spot Bitcoin ETF application had received SEC approval. Once these rumors were debunked, Bitcoin’s price plummeted to below $29,000, marking an approximate 8% loss. The SEC released a warning against relying on internet speculation, emphasizing that verified information comes directly from them.

The SEC has been managing growing optimism surrounding Bitcoin ETFs while delaying decisions on numerous applications. A crucial moment occurred when the Court of Appeals ruled in favor of Grayscale in its lawsuit against the SEC, which pertained to the denial of its application to convert the Grayscale Bitcoin Trust into an ETF. The SEC chose not to appeal this ruling, potentially paving the way for other traditional companies, such as Invesco and Franklin Resources—both of which have received a Hold rating and are awaiting approval to enter the cryptocurrency space. BlackRock is viewed as a key participant in this ongoing process.

JPMorgan analysts, led by Nikolaos Panigirtzoglou, also foresee imminent SEC approval for a spot Bitcoin ETF. Galaxy Digital’s CEO, Mike Novogratz, anticipates that approval could come as early as February, estimating a time frame of “four to six months.” He collaborated with Invesco to submit a revised application to the SEC in June. The court’s decision to allow futures-based Bitcoin ETFs while denying spot ETFs could have serious implications for the SEC if it were to reconsider previously granted approvals.

This article was produced with AI assistance and reviewed by an editor.