Bitcoin
BlackRock Bitcoin ETF Pressures SEC to Approve
The U.S. Securities and Exchange Commission (SEC) has acknowledged the spot Bitcoin ETF applications from finance giants BlackRock and Fidelity. BlackRock’s application in particular is a landmark move that has Bitcoin community optimistic about an approval.
BlackRock, the world’s largest asset manager, has $9 trillion in assets under management, while Fidelity has £3.9 trillion. The ETF applications by the financial giants signals a growing appetite for Bitcoin from Wall Street and is a significant towards Bitcoin becoming a mainstream financial asset.
A spot Bitcoin ETF could potentially open the floodgates for a new wave of investors, including corporate treasuries, pension funds , and high-net worth investors eager get exposure to Bitcoin, but unable (or unwilling) to directly hold the asset themselves.
SEC: A Sceptic Turning the Corner?
The road to a Bitcoin ETF has been fraught with regulatory hurdles and scepticism. The SEC has rejected every single application to date, ostensibly to protect investors, while approving Bitcoin ETFs based on Futures, Leveraged Futures, and even a Short ETF betting against the price of BTC. All of these ETFs get pricing signals from the underlying Bitcoin asset, and represent significantly more risk to investors — so it does not make sense to approve an ETF based on the underlying Bitcoin, while rejecting an ETF containing the asset itself — a point echoed by the community, the investment industry, and also cryptocurrency exchanges. This inconsistent policy framework has made the SEC appear belligerent and recalcitrant.
The tide does seem to be turning. The filing and acceptance of these applications for review may signal a shift in the SEC’s stance and a willingness to engage more deeply with industry.
BlackRock has had 575 ETF applications approved, and only 1 ETF application rejected in its entire history. Many observers take this as a strong signal that the politically connected BlackRock is highly confident of an approval. We have already seen CEO Larry Fink pushing the case for Bitcoin with bullish comments on US national TV in consecutive weeks, so the pressure is building on the SEC.
Bitcoin Investing Made Easy
A spot Bitcoin ETF, if approved, would be a game-changer. It would allow millions of investors to gain direct exposure to Bitcoin through their brokerage accounts, bypassing the need to buy and hold Bitcoin themselves with a hardware wallet, a technical solution that many retail customers find intimidating.
Currently, investing in Bitcoin involves setting up a digital wallet, understanding how to manage private keys, and navigating cryptocurrency exchanges. Many find this daunting, especially older investors accustomed to dealing with banks and brokers through centrally administered accounts.
A Bitcoin ETF would eliminate these complexities and make it as easy to invest in Bitcoin as it is to buy stocks or bonds for the richest demographic in the United States; Baby-Boomers. This would significantly lower the barrier to entry for many investors, potentially ushering in a new era of widespread Bitcoin adoption.
The involvement of BlackRock and Fidelity, with their vast funds under management, lends further credibility to Bitcoin in the eyes of the mainstream. Their reputations and influence in the financial and political worlds could tip the scales in favour of approval. Maybe now, the dream of a Bitcoin ETF just might become a reality. It’s certainly long past due.
The SEC has a statutory period of 45 days from the date of acknowledging a Bitcoin ETF application to make a decision. However, the SEC can extend this period up to a maximum of 240 days. Given the SEC’s history with Bitcoin ETF applications, it’s likely that it will use the full 240-day period to make a decision. This means BlackRock, Fidelity, and the Bitcoin community could be waiting up to eight months.