BTC Hits $30K Due To Grayscale and BlackRock Spot Bitcoin ETF Proposals
Bitcoin enthusiasts witnessed Bitcoin jump past $30K after the world’s largest asset manager, BlackRock, made headlines by filing for a Bitcoin spot price exchange-traded fund (ETF) on June 15, 2023. Will BlackRock Bitcoin ETF get approved? While the United States currently prohibits spot ETFs, the involvement of a prominent entity like BlackRock could potentially pave the way for overcoming legal obstacles. The approval of a spot Bitcoin ETF in the United States has long been a hotly debated topic. But recent developments suggest that the tide may be turning in favor of approval.
Join us at YetAnotherDeFi as we explore the race for a Bitcoin spot ETF, dissect the distinctions between BlackRock’s and Grayscale’s offerings, and discuss the renewed optimism and wave of new filings in the industry.
BlackRock Aims For US’s First Spot Bitcoin ETF
In June 2023, BlackRock, the world’s largest asset manager, with over $8.59 trillion in assets under management as of Dec. 31, 2022, filed an application with the SEC for a spot Bitcoin ETF.
The primary objective of the ETF is to simplify the process of investing in Bitcoin by eliminating the complexities and operational burdens associated with direct investments.
If approved, it would become the first cryptocurrency spot ETF in the United States. The filing, made on June 15 and reported by the Nasdaq stock exchange, states that Coinbase Custody Trust Company will act as the custodian for the fund’s Bitcoin holdings, while Bank of New York Mellon will custody its fiat assets. BlackRock’s iShares Bitcoin Trust is expected to be traded as Commodity-Based Trust Shares.
The approval of a spot Bitcoin ETF would be a major step forward for the crypto industry and allow investors to gain exposure to Bitcoin without having to directly purchase the asset. If taken, this step would make Bitcoin more accessible to a wider range of investors and could help to drive the price of Bitcoin higher.
Swap WBTC with YetAnotherDeFi!
Rally For Bitcoin ETF Approval
Despite multiple applications, SEC has not yet granted approval for a spot Bitcoin ETF. Grayscale, a prominent player in the industry, has appealed the SEC’s rejection of its ETF application and is currently pursuing legal action. In a similar vein, ARK Invest, headed by Cathie Wood, and European investment firm 21Shares have also been actively advocating for spot Bitcoin ETF approval, submitting their third applications in April. The recent submission by BlackRock has reignited optimism among investors and triggered a wave of new filings.
WisdomTree, a New York-based asset management fund, filed its application for a spot Bitcoin ETF on June 21, aiming to list it on the Cboe BZX Exchange under the ticker symbol “BTCW.” A notable distinction between WisdomTree’s filing and BlackRock’s application is that WisdomTree intends to establish a “surveillance sharing agreement” with the Chicago Mercantile Exchange (CME) futures markets. This aligns with the SEC’s approval of a Bitcoin futures fund by Teucrium, which highlighted the CME’s robust surveillance capabilities as a contributing factor.
Shortly after WisdomTree’s filing, global investment manager Invesco “reactivated” its application for a similar spot Bitcoin ETF. Invesco’s filing emphasizes the use of professional custodians and service providers, eliminating the need for investors to rely on loosely regulated offshore entities.
Grayscale Might Win, In The End
Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, expressed his perspective on Twitter, suggesting that if BlackRock’s ETF is approved, Grayscale’s Bitcoin Trust ($GBTC) would benefit significantly. Is Grayscale a good investment? Cochran believes that BlackRock’s approval would provide a roadmap for conversion, ultimately resolving the over 40% discount that $GBTC has been trading at, and he sees favorable odds for BlackRock’s ETF Bitcoin to gain regulatory approval in the United States.
It’s important to note that while both BlackRock’s proposed investment vehicle and Grayscale’s product are technically trusts, there is a key distinction that sets them apart. BlackRock’s application is for an ETF, which allows redemptions and functions similarly to an ETF despite being referred to as a trust. On the other hand, Grayscale’s Bitcoin Trust lacks a redemption mechanism, making it dissimilar to BlackRock’s proposal. The ability of an ETF to adjust its asset holdings in line with the trading price distinguishes it from a trust, which can lead to occasional discrepancies between its value and underlying assets.
Bitcoin Jumps To $30K After BlackRock iShares ETF Filing
Why is Bitcoin going up? In response to the development in the niche,the Bitcoin price demonstrated a positive response, surging over 1.3% within an hour after the announcement of BlackRock’s filing. The cryptocurrency had recently dipped below $25,000 due to concerns regarding U.S. regulatory scrutiny and central bank policies. However, the news of BlackRock’s intention to establish a spot Bitcoin ETF rekindled hope among investors, indicating a renewed belief in the possibility of such an ETF despite past rejections from the SEC.
How much is Bitcoin worth? In a remarkable extension of its weekly gains, Bitcoin reclaimed the $30,000 mark after Wall Street opened on June 21. Data from TradingView confirmed a significant milestone for the cryptocurrency, with Bitstamp recording a new high of $30,340, marking a multi-month peak.
Throughout the day, the price action of BTC remained highly active, driven by bullish momentum. This surge allowed BTC/USD to recover from several weeks of decline, surging over 20% from its local lows below $24,800, observed on June 15. The upward trajectory showcased the resilience and potential of Bitcoin in the face of recent market challenges.
BlackRock’s announcement reignited optimism regarding the possibility of a spot Bitcoin ETF, despite the SEC rejecting numerous applications over the past 18 months. The proposed fund, to be named the iShares Bitcoin Trust, will primarily consist of Bitcoin held by a custodian on behalf of the Trust. According to the filing, Coinbase, a prominent crypto exchange, will act as the custodian for the fund’s Bitcoin holdings.
This development of a spot Bitcoin ETF could provide additional avenues for investors to participate in the cryptocurrency market within a regulated framework.
Co-founder & CEO at Cryptoquant.com Ki Young Ju tweeted that someone(s) is just buying BTC a lot. “I repeat. This is not a short squeeze, but someone(s) is just buying BTC a lot.”
