Could the new bitcoin-based exchange-traded fund (ETF) application submitted by BlackRock really be a gamechanger for the crypto arena? According to some analysts, the answer is a resounding “yes.”
The BlackRock ETF Could Really Change Things
ETFs are nothing new. In fact, travel around the world and you’ll see many countries have permitted them, even the United States. The problem is that they are all based on other commodities such as oil, copper, etc. Very rarely is a bitcoin-based ETF given a stamp of approval, least of all by the U.S. and the Securities and Exchange Commission (SEC), which has been on a mission to remove crypto from America’s financial halls for the past several years.
There have been many companies over long periods – like Van Eck and Bitwise – that have tried desperately to get bitcoin ETF applications approved by the SEC, and each time, they’ve come up short. The SEC has made it clear it’s not interested in even looking at the paperwork, as often, the organization has said “no” without even giving these applications their fair dues, so it’s interesting that BlackRock, right out of the blue, could submit the same application and somehow appear to garner respect and attention from the SEC.
The big clincher here is that BlackRock is a standard financial firm that has a good track record with the SEC, so many analysts believe that this could truly be the way forward. Gabor Gurbacs – advisor at Van Eck and Tether – commented in a recent interview that there is no logical reason for the SEC to have disapproved of a bitcoin ETF for this long. He stated:
The SEC cited concerns about potential market manipulation, custody issues, and the overall maturity of the underlying market… A spot bitcoin ETF represents direct ownership of an underlying asset, such as bitcoin. When you buy a share of a spot ETF, the fund physically acquires an equivalent amount of the asset, providing a near one-to-one exposure, excluding fees.
He further stated that a bitcoin ETF can positively influence the crypto space like no other product. He mentioned:
First, it could broaden bitcoin’s investor base by providing a familiar and broadly regulated means for individuals and institutions to gain exposure to bitcoin. It would likely boost liquidity and improve price discovery. Second, it could potentially lead to increased institutional adoption, which could, in turn, contribute to greater market stability and less price volatility.
Changes Were Needed
It should be made clear that the BlackRock application wasn’t accepted right away. It was initially rejected, and the company was told that certain changes would have to be made to garner consideration.
Those changes have since been implemented and the application is now being reviewed for the second time by the SEC.
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