BlackRock Inc.’s surprise move to apply to create a spot Bitcoin ETF in the US last week led to a “storm” of similar applications from rival firms, as speculation is rife that BlackRock has information that it will receive SEC approval.
The above development caused the price of Bitcoin to rise by more than 20%.
After BlackRock, the move was followed by Invesco Ltd, which renewed its application to create the “Invesco Galaxy Bitcoin ETF,” while WisdomTree applied for the “WisdomTree Bitcoin Trust” and Bitwise.
BlackRock paved the way
The slew of applications comes in the wake of BlackRock’s attempt to launch the “iShares Bitcoin Trust,” with the filing of an application with US regulators last week.
Given BlackRock’s position as the world’s largest money manager, with some $9 trillion under management, the filing is seen by many as an indication that the SEC may finally give the green light to a spot Bitcoin ETF, backed naturally by Bitcoin, a structure that the regulator has repeatedly rejected, citing risks as fraud and market manipulation.
“When the world’s largest asset manager makes a move like this, other firms will take notice because so much is at stake in the race for a spot Bitcoin ETF,” Nate Geraci, president of advisory firm The ETF Store, said, adding: “There is absolutely no indication that the SEC is ready to give approval for a spot Bitcoin ETF. The likely assumption is that BlackRock may know something.”
GBTC benefits too
In addition to the Bitcoin price rally, the developments with the massive applications for a spot Bitcoin ETF also led to a reduction in the Grayscale Bitcoin Trust’s (GBTC) discount to net asset value.
Industry supporters, such as Cameron Winklevoss of Gemini Trust Co., were quick to speak positively about the Bitcoin price recovery to defend it, following a series of negative events that have hit the cryptocurrency industry in recent times.
Bitcoin ETF spot dumps only
The new attempt to create a spot Bitcoin ETF followed a long string of rejections of such applications by the SEC. There had been about 30 attempts for such a product, according to a count by Bloomberg Intelligence, which did not come to fruition.
Now, with BlackRock entering the “fray,” we wait to see what the outcome will be. Many are saying, “For BlackRock to do it, they must have discounted the positive response.”
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