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BlackRock ETF Filing is Sending Investors to Bitcoin as Market Dominance Tops 50%

Last Updated June 26, 2023 10:52 AM
Teuta Franjkovic
Last Updated June 26, 2023 10:52 AM
Key Takeaways
  • The market share of Bitcoin across all cryptocurrencies has surpassed 50%.
  • Analysts feel that a potential DeFi summer is unlikely, and that Bitcoin’s decline below $30,000 is unimportant
  • SEC still hasn’t announced a specific date when it will decide whether to approve BlackRock’s Bitcoin ETF

Major cryptocurrencies quickly surged late on June 19, , helped by market excitement surrounding BlackRock offer for an exchange-traded fund (ETF) based on Bitcoin.

Once more, Bitcoin has achieved a big milestone. “Bitcoin dominance,” a metric used to gauge its influence over the whole crypto market cap, has officially surpassed the 50% threshold.

As of Monday, June 20, according to TradingView data, Bitcoin has a slight majority of the market. This shows that of the $1.1 trillion market valuation of cryptocurrencies, Bitcoin represents 50% of the total. According to information from CoinMarketCap , the market valuation of Bitcoin as of right now is over $521 billion.

BlackRock’s Bitcoin ETF Could Be Approved Imminently

According to entrepreneur, investor and Bitcoin proponent David Bailey , After years of unsuccessful attempts by other companies, BlackRock’s Bitcoin Exchange-Traded Fund could finally be approved.

BlackRock’s entry into the Bitcoin ETF market, according to Bailey, the CEO of BTC Inc. and a board member at the University of Alabama, may tilt the scales in favor of regulatory adoption.

Bailey’s most recent remarks regarding the likely approval of BlackRock’s BTC ETF are based on the asset management company’s June 15th filing with the SEC.

If approved, the ETF would give investors a way to invest in Bitcoin without really possessing it, which may have a big impact on the price of BTC.

Still, an analyst under the Twitter name Credible Crypto  commented that instead of being a reason for fear, Bitcoin’s decline below $30,000 is a crucial stage in the cryptocurrency’s upward trend toward new annual highs.

“The situation with Bitcoin right now is like a kerosene-soaked rag in the middle of a forest filled with dead trees – all it will take is a single spark of demand (could be in the form of a number of positive fundamental catalysts – the reason behind the spark doesn’t matter) to set that rag on fire. And once that rag is on fire, the move-up will start. Slowly at first, then all at once – just as a forest fire starts from a single spark and soon becomes an uncontrollable blaze, obliterating anything and anyone in its way,” he said.

The SEC has Not Specified a Deadline for its Decision

ETF approval by the SEC can be a protracted and difficult procedure. ETF plans must be evaluated by the SEC to make sure they are in the best interests of investors and that they adhere to all applicable rules and regulations.

Since the SEC has raised worries about the possibility of fraud and market manipulation in the cryptocurrency market, the agency has typically taken several months to review and approve Bitcoin ETF proposals.

The SEC has already turned down many proposals for Bitcoin ETFs due to worries about market volatility, liquidity, and the possibility of fraud.

The regulator, on the other hand, may soon be more receptive to licensing a Bitcoin ETF, according to some analysts, given recent developments like the increased institutional acceptance of Bitcoin.

The fact that BlackRock, one of the biggest asset managers in the world, is supporting the new Bitcoin ETF, in light of these developments, could be a game changer, claims Bailey. According to him, authorities may find it simpler to approve the product in a matter of “days to weeks” due to BlackRock’s name and clout in the financial sector.

It’s important to remember that the SEC hasn’t announced a specific date when it will decide whether to approve BlackRock’s Bitcoin ETF or any other pending ETF proposals. A proposal may not be approved at all, or it may take several months or even years, due to the agency’s often opaque approval procedure.

Grayscale Bitcoin Trust (GBTC) Reacted By Jumping Over 12%

BlackRock’s knock-on effects have boosted investor optimism and driven Grayscale’s Bitcoin Trust (GBTC) to new heights.

Before the markets closed on Friday, GBTC saw a gain of more than 12%, with share prices reaching $15.12, according to Yahoo Finance . In celebration of Juneteenth, a federal holiday marking the day word reached Texas that slaves had been freed, U.S. markets were closed on Monday.

With the help of Grayscale’s flagship product, GBTC, investors can trade shares in trusts that hold pools of Bitcoin, with each share intended to reflect the current price of Bitcoin. This allows investors to obtain exposure to Bitcoin without having to purchase and hold the commodity directly.

According to YCharts , the so-called “GBTC Discount,” which measures the price difference between Bitcoin and other currencies, reached a monthly low of -36.61% when the price of Bitcoin was $26,436. The net asset value (NAV) of GBTC’s Bitcoin holdings is different from the price of the shares, and this is referred to as the discount.

Bullish Days Ahead?

But today seems to be a bullish day for investors. BlackRock’s flawless track record for ETF applications (now at 575-1) has given GBTC a breath of fresh air despite what seems to be an ongoing legal struggle with the SEC.

The SEC has been unrelenting in its “anti-crypto” attitude, suing a number of well-known business figures in recent weeks. Gary Gensler, the chair of the SEC, is well-known for having instructed a course on Bitcoin and blockchain technology at MIT. He has been a fierce opponent of the cryptocurrency industry.