Could BlackRock Finally Overcome the SEC's Objection to a Bitcoin ETF?
Could BlackRock Finally Overcome the SEC's Objection to a Bitcoin ETF?
BlackRock, the world's largest asset manager with approximately $10 trillion under management, has recently made a groundbreaking move by applying to launch an Exchange-Traded Fund (ETF) that tracks Bitcoin. This application has sparked speculation among commentators who believe that BlackRock's positive track record in gaining SEC approval for similar products, combined with its proposed "surveillance-sharing agreement" between exchanges, could potentially break down the regulatory hurdles that previous applicants have faced.
Image by. freepik.com
Despite repeated denials by the U.S. Securities and Exchange Commission (SEC) over the past six years, even for applications from prominent institutional players like Kathy Wood's technology-focused hedge fund firm Ark, BlackRock's stature and unique approach have raised hopes of a different outcome this time. Notably, Grayscale, a major player in the crypto market, even resorted to suing the SEC last October after its similar product failed to receive approval.
While the approval of BlackRock's Bitcoin ETF request is still uncertain, the mere possibility of institutional investors gaining exposure to the cryptocurrency without direct ownership has already had a significant impact. The price of Bitcoin surged by approximately 15% to reach a one-and-a-half-year high, surpassing $30,000. However, it's important to note that the current price remains about 53% lower than the all-time high of over $65,000 reached in November 2021.
The financial industry eagerly awaits the SEC's decision on BlackRock's application, as it could potentially open the floodgates for institutional investment in Bitcoin and further shape the future of the cryptocurrency market
BlackRock's iShares Bitcoin Trust fund, as outlined in their application to the SEC, will utilize the platform of the American trading exchange Coinbase, along with its Coinbase Custody services. If approved, the ETF is expected to be listed and traded on the Nasdaq exchange. It's worth noting that BlackRock's founder and CEO, Larry Fink, previously made critical remarks about Bitcoin, referring to it as an "index for money laundering" and suggesting that the company's clients had no interest in the cryptocurrency. However, BlackRock took a different stance in the summer of 2022, establishing a connection with Coinbase to provide its private clients with access to the crypto market. In a letter to investors, the company cited the growing interest among customers in the field. BlackRock is a global investment firm that manages assets for the general public, with Anath Levin overseeing operations in Israel, bringing significant experience from their previous roles at Bank Hapoalim, Clal Insurance, and Migdal Insurance. The company offers a wide range of investment products, including passive options like ETFs, as well as managing hedge funds, private equity funds, and debt funds.
BlackRock's move to launch a Bitcoin ETF comes at a time when the cryptocurrency market is attempting to recover from a period of distress. In the past year, several companies in the industry faced bankruptcy, resulting in investors losing access to their funds. Additionally, the timing of BlackRock's ETF application coincides with recent SEC enforcement actions against leading crypto exchanges Binance and Coinbase, targeting various securities law violations and instances of potential investor fraud.
Interestingly, Larry Fink, who previously expressed skepticism towards Bitcoin, has now gained favor among significant parts of the crypto community. Michael Novogratz, the CEO of Galaxy Digital and a long-time crypto investor, remarked that the approval of BlackRock's ETF would be highly beneficial for Bitcoin, highlighting a shift in sentiment towards Fink's change in stance.
An ETF based on Bitcoin would offer investors exposure to the currency without requiring actual ownership. Instead of navigating complex purchasing processes or using questionable platforms, investors could simply buy shares that mirror the price movements of the underlying asset. However, for the past six years, the SEC has consistently rejected proposals for such funds, with the exception of those tied to futures contracts. The SEC's rejections have been based on various grounds, but a recurring and central concern revolves around the potential for price manipulation on unregulated platforms. The SEC has pointed to instances of fraudulent trading practices, such as wash trading, within the market, as well as the ability of influential market participants to exploit Bitcoin's price for personal gain. The inherent lack of supervision and transparency in the cryptocurrency market poses significant challenges for the SEC in monitoring and detecting fraudulent activities. Granting approval for the requested ETF would raise legitimate concerns regarding investor protection in this nascent market
cryptocurrency,crypto,altcoin,altcoin daily,news,best investment,top altcoins,ripple,best crypto investment,ethereum,crash,bottom,price,prediction,podcast,interview,finance,stock,investment,too late,bitcoin,cryptocurrency news,bitcoin news,cryptocurrency news media online,best crypto investments,2023 prediction,best nfts,bitboy,coin bureau,binance,coinbase,coffeezilla,larry fink,blackrock,fidelity,secret,shadow,conspiracy,bill gates,paris,etf,bitcoin etf,cnbc,esg
Post a Comment for "Could BlackRock Finally Overcome the SEC's Objection to a Bitcoin ETF?"