How BlackRock’s Bitcoin ETF Could Ignite a Crypto Bullrun

The world of cryptocurrencies is buzzing with excitement as BlackRock, the world’s largest asset manager, has filed an application for a spot Bitcoin ETF (exchange-traded fund) with the U.S. Securities and Exchange Commission (SEC).


This is a major milestone for the crypto industry, as it could open the door for more institutional adoption and investment in Bitcoin, the leading cryptocurrency by market capitalization.

What is a Spot Bitcoin ETF?

A spot Bitcoin ETF is a fund that tracks the underlying market price of Bitcoin, allowing investors to get exposure to the cryptocurrency without directly buying or holding it. A spot Bitcoin ETF would offer several advantages over other ways of investing in Bitcoin, such as:

• Lower fees and risks: Investors would not have to pay high commissions or custody fees to buy and store Bitcoin on digital asset exchanges or wallets, which are also vulnerable to hacking or theft.
• Higher liquidity and accessibility: Investors would be able to buy and sell shares of the ETF on regulated stock exchanges, which have more trading volume and availability than crypto platforms. Investors would also be able to use their existing brokerage accounts and trading tools to access the ETF.
• Greater transparency and compliance: Investors would benefit from the regulatory oversight and disclosure requirements of the SEC, which would ensure that the ETF is compliant with securities laws and that its holdings are audited and reported regularly.

Why is BlackRock’s Filing Significant?

BlackRock’s involvement in the Bitcoin ETF space brings substantial credibility and influence to the market. With $10 trillion in assets under management, BlackRock is the world’s biggest asset manager and one of the most respected and established financial institutions.

BlackRock’s endorsement of Bitcoin could pave the way for increased institutional adoption and potentially open the floodgates for more institutional investment in cryptocurrencies.
BlackRock has also chosen Coinbase Custody as its trusted custodial solution for its proposed ETF. 

Coinbase is one of the largest and most reputable crypto platforms in the world, with over 70 million verified users and over $400 billion in assets on its platform. Coinbase has also been a pioneer in crypto regulation and innovation, being the first crypto company to go public on Nasdaq in April 2021. By partnering with Coinbase, BlackRock is signaling its confidence in the security and reliability of its crypto custodian.

How is the Market Reacting?

The market reaction to BlackRock’s filing has been positive and bullish. Bitcoin prices closed up 2% on Thursday after the announcement. They were last at $25,506 on Friday. The largest cryptocurrency, BTC is up 54% in the year, beating major commodities and stock indexes.

The filing has also boosted the sentiment and performance of other crypto-related assets, such as Tradecurve, a leading crypto trading platform that offers users access to over 100 cryptocurrencies, futures, options, margin trading, and more. 

Tradecurve has seen its monthly chart surge by 80% since BlackRock’s filing, indicating strong demand and growth for its services. Tradecurve is also set for 100% growth in 2023, as it plans to expand its global presence and launch new products and features.

What are the Challenges and Opportunities Ahead?

While BlackRock’s filing is a positive development for the crypto industry, it does not guarantee that the SEC will approve its application. The U.S. regulator has yet to approve any applications for spot Bitcoin ETFs, despite receiving several proposals from firms such as Fidelity, Cboe Global Markets, and NYDIG. 

The SEC has also rejected Grayscale Investment LLC’s application last year to convert its flagship spot Grayscale Bitcoin Trust into an ETF.

The SEC has expressed concerns about the potential risks and challenges of regulating spot Bitcoin ETFs, such as market manipulation, fraud, volatility, custody, liquidity, valuation, arbitrage, and investor protection . The SEC has also been cracking down on major crypto exchanges such as Coinbase and Binance for allegedly violating securities laws or commingling customer funds with their own.

However, there are also signs of hope and progress for the approval of spot Bitcoin ETFs. The SEC has recently approved several Bitcoin futures ETFs, which track the price of Bitcoin futures contracts rather than spot prices . These ETFs have attracted significant interest and inflows from investors, demonstrating the demand and viability of crypto products in the U.S. market.

Conclusion

BlackRock’s filing for a spot Bitcoin ETF is a historic and exciting moment for the crypto industry, as it could usher in a new era of institutional adoption and investment in Bitcoin. The filing also showcases the strength and resilience of the public’s interest in crypto, despite the regulatory hurdles and challenges.

The approval of a spot Bitcoin ETF by the SEC would be a game-changer for the crypto market, as it would boost its legitimacy, liquidity, and accessibility. It would also likely spark a fire for a new bullrun, as more investors would flock to Bitcoin as a store of value and an alternative asset class.