The rumor has come true: the world’s largest asset manager, BlackRock, has filed an instant Bitcoin ETF application with the US Securities and Exchange Commission (SEC). For custodial data and market price, BlackRock chooses Coinbase, despite the SEC’s lawsuit. And while the news looks very bullish for the BTC price, the community is wondering if it’s good or bad for BlackRock’s entry into Bitcoin.
For many years, the Bitcoin ETF was seen as the Holy Grail of Bitcoin in the US for attracting huge amounts of new capital. To date, many asset managers have cut their teeth at the SEC when it comes to spot bitcoin ETFs.
However, the SEC has a long history of denying spot ETFs citing concerns about market manipulation and the lack of a watch-sharing agreement between a “volume regulated market” and a regulated exchange.
11/ pic.twitter.com/yqwhy3wLT3
– Thissy (@thiccythot_) June 16, 2023
What are the opportunities for the BlackRock Spot ETF?
Although future-based ETFs exist in the US, they do not require “real” bitcoins to be settled, as they are settled in cash. On the other hand, instant ETF promises big inflows. As Joe Consorti, market analyst at The Bitcoin Layer, explains, the “gates to 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. Given its reputation, BlackRock has the “highest probability” of any previous attempt to get ETF approval outright, As the consort notes. BlackRock is the world’s most powerful and best connected asset manager.
It’s clearly going to make a difference whether it’s the Winklevoss twins or Grayscale spinning an ETF app or the world’s largest asset manager, led by Larry Fink. But for SEC Chairman Gary Gensler, the request comes at the worst possible time.
Turning down BlackRock is also likely to prove more difficult for Gensler. Messing with Blackrock and getting in more trouble over a lame justification for rejecting a Bitcoin ETF wouldn’t be politically astute for the agency.
BlackRock’s partnership with Coinbase is an interesting point that will likely make Gensler sweat. However, the Bitcoin spot ETF may never have had a greater opportunity to “open” the floodgates to institutional capital.
Good or bad for Bitcoin?
Aside from the money flows, the critical voices in the community are multiplying though, because BlackRock is in fact the so-called “enemy”. The famous analyst Bentoshi He writes:
Everyone before: We hate Blackrock, we hate suits, they screw up the system, they’re scammers
Everyone’s down 99%: wow black rock enters. This is amazing! In two years, I might only be 90% thinner!
Meanwhile, analyst and co-founder of Reflection Research, Will Clemente, states that it is “undeniable” that Operation Chokepoint 2.0 was orchestrated when BlackRock “kicked out local crypto companies and brought in large traditional companies that are friends with the US government to try to control it.” Bitcoin/crypto” if BlackRock gets SEC approval.
Bitcoin guru Anil (@anilsaidso) examined BlackRock’s ETF application and found a “hidden gem” in the ETF offering. According to the document, in the event of a hard fork, BlackRock has discretion to decide which network it sees fit. Furthermore, there is no guarantee that BlackRock will ultimately choose the most valuable fork.
A hidden gem in the BlackRock ETF.# JetForked https://t.co/tER6xxZPui pic.twitter.com/Qdt8BZ2OEZ
– anil ⚡ (@anilsaidso) June 15, 2023
It is not clear when the SEC will decide on the application. The SEC has up to 240 days to make a decision and has always exhausted this time in recent years. If so, the decision would be made in mid-February 2024, significantly just a month before Bitcoin plunged.
At the time of publication, BTC price is at $25,552 and has retraced the 200-day EMA (blue line).
Featured image from Reuters, chart from TradingView.com