Giant asset manager BlackRock Inc. is poised to take a significant leap forward in the competitive landscape if the United States Securities and Exchange Commission (SEC) gives the green light to spot Bitcoin ETF. Market observers believe that BlackRock’s approval is likely, and the company may have already initiated strategic moves to establish its dominance in the ETF race.
BlackRock’s potential ETF strategy
Bloomberg ETF analyst Eric Balchunas has hinted at BlackRock’s potential ETF strategy. He suggests that BlackRock could transfer the assets from its spot Bitcoin private trust into its ETF once it secures regulatory approval. Although this move wouldn’t create new demand, it could provide a substantial boost to BlackRock’s iShares Bitcoin Trust during the early stages of the competition.
BlackRock initially launched its spot Bitcoin private trust last August, catering to institutional clients’ growing interest in cryptocurrencies. The trust allows these clients to track Bitcoin’s performance directly. With nearly $200 million already invested in this trust, BlackRock is well-positioned to make a splash in the ETF market if the SEC approves its application, even if other applicants simultaneously receive approval.
Recent BlackRock ETF updates
BlackRock has recently filed amendments to its ETF application, indicating that the company has engaged in constructive discussions with the SEC. The updated filing includes plans to implement robust monitoring measures to swiftly detect suspicious or irregular market movements.
It also outlines BlackRock’s commitment to comply with Anti-Money Laundering (AML) requirements and avoid manipulation or fraud, with an audited statement from financial services giant PricewaterhouseCoopers (PwC) reinforcing this commitment.
Furthermore, BlackRock’s filing signals its readiness to collaborate with third-party platforms to enhance know-your-customer (KYC) compliance. The company appears confident that the SEC will grant approval for its ETF application by January.
BlackRock’s plans for an ETF are advancing rapidly, as the firm recently announced securing seed funding. An undisclosed investor has committed to purchasing $100,000 worth of iShares Bitcoin Trust shares at $25 per unit. The investor has already received 4,000 shares as of October 27, 2023.
In addition to its Bitcoin ETF endeavors, BlackRock submitted an application for a spot Ethereum ETF to the SEC last month. To bolster its Ethereum ETF offering, the company appointed major crypto exchange Coinbase Global Inc (NASDAQ: COIN) as the asset custodian.
Bitcoin’s recent performance
The anticipation surrounding spot ETFs has injected new energy into the world’s largest cryptocurrency, Bitcoin. Bitcoin reached a new all-time high for 2023 on Monday, surging to $42,100. Since then, it has maintained consistent gains. As of the latest data from CoinMarketCap, Bitcoin is trading at $44,000, representing a nearly 16% increase over the past seven days and a 5.6% gain in the last 24 hours.
Bitcoin’s year-to-date performance is particularly noteworthy, with a gain of 165.49%. Over the past three months, it has risen by more than 71%, and in the last month, it has climbed by nearly 24%, according to Current Marketwatch data.
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