TradFi is seeking approval for US Bitcoin ETFs
Key Takeaways
- Major financial institutions seek approval for US Bitcoin ETFs, signaling a shift in the crypto industry’s ETF approach.
- Grayscale’s conversion success and BlackRock’s application suggest a shifting landscape for crypto financial products.
- Bitcoin briefly exceeded $30,000 amid price swings following a false report of SEC approval for a spot Bitcoin ETF.
There may soon be more alternatives available to those who wish to wager on Bitcoin, and this has Twitter in a frenzy as ‘Bitcoin ETF’ is trending following a bout of confusion news.
Major financial institutions, including BlackRock, Fidelity, and Invesco, have applied to sell US “spot” exchange-traded funds (ETFs) directly linked to holdings in Bitcoin, while Grayscale Investments LLC has been successful in its effort to convert its Bitcoin trust into an ETF, having won a court decision on August 29.
These products have frequently been rejected by the US Securities and Exchange Commission (SEC) in the past due to concerns about volatility and possible manipulation. However, the Grayscale decision and the BlackRock filing, in particular, may indicate that the cryptocurrency industry is taking the lead.
However, many jumped the gun when a bogus report emanated from Cointelegraph suggesting that the SEC had approved the first offering in the U.S. With all the bubbling news, it is unsurprising that Twitter is so active around this point.
Crypto Twitter Frenzy
Some of the reasons why ‘Bitcoin ETF’ is trending on Twitter include progress being made by Fidelity, BlackRock’s continued push in this space, and a looming deadline on their decision, as well as positive news for Grayscale. Not to mention, socio-economic factors like global conflicts, also have people looking towards safe-haven assets.
As industry analysts and influencers expect that BlackRock’s Bitcoin spot ETF will launch soon, anticipation is growing. The popular cryptocurrency YouTuber Crypto Rover, who boasts an incredible 100,000 subscribers, claims that the BlackRock Bitcoin spot ETF’s actual expiration date or target date is within the next 60 to 90 days.
This forecast is based on BlackRock’s decision to forgo an appeal of Grayscale’s recent legal victory, which suggests that they lack any legal justification to deny any Bitcoin Spot ETF applications.
The final date for the initial application from ARK , another significant participant in the crypto investment space, is set for January 10, 2024, according to Crypto Rover. Crypto fans predict that, should the SEC decide to approve any ETF, it will likely do so simultaneously with all others rather than picking one and rejecting the others.
Therefore, the consensus among industry insiders is that the launch of the first Bitcoin spot ETF is likely to occur well before January 10, 2024.
“Gary Gensler is standing in the way of spot Bitcoin ETFs – Cathie Wood,” according to “The Wolf Of All Streets.” The CEO of a well-known asset management company, Cathie Wood, stated that she does not believe the SEC as a whole, but rather SEC Chair Gary Gensler, is the biggest barrier to the establishment of a Bitcoin ETF.
Wood claims that the SEC staff is knowledgeable about BTC and understands its benefits. She went on to question Gensler’s decision to support a Bitcoin futures ETF while opposing a spot Bitcoin ETF, despite the latter’s lower counterparty risk.
Notably, the SEC has already denied Ark Invest’s requests to launch ETFs twice. Grayscale Investments’ recent legal victory has increased pressure on the SEC to reconsider its position on spot Bitcoin ETFs.
Bitcoin On The Week Rally
In the last 24 hours, the price of Bitcoin fluctuated around $28,450, staying steadfastly above a range of around $26,000 that had remained for most of the previous two months due to sluggish mood and unusually low volatility and trading volumes.
One of the reasons was the fact that the application for its Bitcoin spot ETF “Wise Origin Bitcoin Trust” had been resubmitted to the SEC, a major ETF issuer with $37 billion in 58 ETFs. The regulator’s concerns that were earlier voiced when rejecting the Bitcoin ETF update are being addressed by the revised proposal.
Following a bogus news report that the SEC had approved a spot Bitcoin exchange-traded fund (ETF), the largest digital asset even soared beyond $30,000 on Monday, most certainly signaling the beginning of ETF-linked volatility.
Since last Friday, when it was revealed that the SEC had decided not to appeal a federal court decision that essentially allowed digital asset management Grayscale to convert its Bitcoin trust into an ETF, Bitcoin has been on the rise.
Since the summer, when BlackRock and other major mainstream financial institutions filed for SEC approval, the possibility of a spot Bitcoin ETF—which would hold the token itself rather than funds holding futures—has been a looming driver for cryptocurrencies.
Although there is still uncertainty and potential roadblocks before any spot Bitcoin ETF starts trading, it is widely predicted that regulatory approval of such funds will revive the cryptocurrency markets and usher in a new wave of investment in Bitcoin. Despite this, traders are becoming more optimistic that the SEC will approve the conversion of the Grayscale Bitcoin Trust.
Look no further than the Grayscale discount. The trust owned by the asset management trades similarly to a closed-end fund, with a price that varies from the net asset value of the Bitcoin it owns. For almost two years, that variance has been discounted, but it is getting smaller: The Grayscale discount was at its tightest since late 2021 on Tuesday, when it was around 15%, down from almost 19% at the beginning of the month.
Crypto – A Safe Haven In The Time Of War
Due to the recent Israel-Palestine conflict, the world is now more aware of the geopolitical tensions in the Middle East. Despite the wide-ranging impacts of the upheaval, one feature that is sometimes regarded as a safe haven in times of unrest has remained unaffected: the stability of the price of Bitcoin (BTC).
Amid the Israeli authorities’ crackdown on cryptocurrency accounts and efforts to sever connections with Hamas following an attack, many have been closed, with millions in crypto assets seized. People attribute this action to growing concerns about global conflicts and their potential impact on the monetary system, prompting some to invest in Bitcoin.
Since Russia’s invasion of Ukraine , cryptocurrencies have been frequently in the news, with demand for the always-volatile bitcoin in both Russia and other countries.
During the greatest attack on a European nation since World War Two, cryptocurrencies have performed as shown in the following charts.
Crypto enthusiasts view the Bitcoin as “digital gold,” a convenient place to deposit funds in times of conflict or calamity. According to the argument, Bitcoin is more secure than conventional currencies because it has a finite quantity and operates on a worldwide computer network outside the control of governments.
Nothing is ever really that easy. Uncertainty surrounds Bitcoin’s potential as a safe-haven asset: It frequently exhibits more risk-on asset characteristics, like equities.
Be it as it may, Bitcoin is not just a speculative asset, it is also a seizure-resistant, policy-independent, longer-term store of value, and the war has contributed to this perception.
It is unclear which of the most recent wave of applications for a Bitcoin ETF the SEC will approve. However, the recent push for one from organisations like BlackRock may be an indicator of a more significant development for the token: the entry of institutional investors.
