The news of American multinational investment giant BlackRock filing for a spot Bitcoin Exchange Traded Fund (ETF) application with the United States Securities and Exchange Commission (SEC) shook the crypto ecosystem with mixed reactions trailing the move.
BlackRock Spot Bitcoin ETF: The Industry’s Concern
The BlackRock filing did not come as a surprise to many as the investment giant has been showing bold support for the premier digital currency for a while now. The firm floated a Bitcoin price index back in September last year as one of its defined moves.
The company is known as the biggest asset manager with about $10 trillion in Assets Under Management (AUM) and it has seen the crypto ecosystem as one of the new growth niches to diversify its capital. Despite the regulatory impasse in the US, BlackRock has launched a crypto ETF in Europe for its customers in the region.
Despite these moves, the application for a spot Bitcoin ETF is considered a rather bold move seeing that the SEC has not approved a related product in the industry’s history.
While the regulator has approved the Bitcoin ETF products based on the futures price of the cryptocurrency starting with ProShares’, top asset managers including Fidelity Investments and VanEck have been denied a Spot Bitcoin ETF application by the SEC over the years. This is the concern in the industry at this time.
Weighing the Chances of BlackRock
What is aggravating these concerns is the current regulatory impasse in the United States seeing the onslaught of the SEC against top crypto exchanges including Coinbase and Binance.
However, Messari Senior Researcher Tom Dunleavy has shared promising statistics regarding previous ETF applications of BlackRock. According to the analyst, BlackRock has secured approval for 575 out of the 576 ETF applications it has made in the past.
Blackrock has succeded in 575 out of the 576 ETF applications it has filed.
— Tom Dunleavy (@dunleavy89) June 16, 2023
This is an excellent statistics but industry insiders are still skeptical as to whether it will be enough to land an approval from the SEC despite the rejections it has handed out to other major competitors in the past.
With the filing, the SEC is typically obligated to share its decision in the next 45 days but the commission can extend the timing if it deems it necessary.