BlackRock’s Imminent Spot Bitcoin ETF Approval and the Future of Cryptocurrency Investments

Bitcoin has made a significant move, surging by 11.5% and surpassing the $35,000 mark. As of Tuesday morning in London, the digital currency was trading at $34,240. This impressive growth represents a year-to-date increase of 109% following a market slump in 2022. The driving force behind this optimism is the expectation of the United States’ first spot bitcoin exchange-traded fund (ETF), with industry giants BlackRock and Fidelity Investments taking the lead.

A U.S. federal appeals court recently confirmed a victory for Grayscale Investments in their pursuit of launching a spot bitcoin ETF, despite objections from the U.S. Securities and Exchange Commission (SEC). Historically, the SEC has been cautious about approving ETFs directly investing in bitcoin, citing concerns related to market manipulation and fraud. However, some analysts believe that the recent court ruling, combined with strong applications from industry leaders, may finally persuade the SEC to reconsider its stance.

Eric Balchunas, an ETF analyst at Bloomberg Intelligence, announced on X (formerly known as Twitter) that BlackRock’s iShares Bitcoin Trust has been listed on the Depository Trust and Clearing Corp with the ticker IBTC. He stated, “This is pretty much checking every box that you need to check before you launch an ETF.”

Last week, bitcoin also experienced a 10% intraday surge due to incorrect reports that BlackRock had already received approval for its fund.

Despite these developments, the SEC remains cautious about bitcoin. While the SEC has approved financial instruments like a bitcoin futures ETF, critics argue that these offerings do not provide the same direct exposure to bitcoin as a spot ETF would.

The SEC’s heightened scrutiny, particularly in the aftermath of events such as the FTX exchange’s bankruptcy, along with its reluctance to approve a bitcoin spot ETF despite congressional appeals, has raised questions about its underlying motivations for delaying approval.

Analysts like Elliott Stein and James Seyffart from Bloomberg Intelligence believe that the approval of a spot bitcoin ETF appears “inevitable,” although the timing remains uncertain. If BlackRock gains approval from the SEC, it could establish a precedent for other applications currently under review, including those from ARK Investment, Fidelity, and Valkyrie.

Cathy Wood anticipates that the SEC is likely to approve all spot bitcoin ETFs simultaneously when it finally grants the green light. This move could bring much-needed clarity to the existing web of rules and regulations.

The listing of BlackRock’s iShares spot bitcoin ETF on the DTCC and its forthcoming debut on Nasdaq is seen by many as a sign that SEC approval is on the horizon. If this occurs, it would not only be a victory for BlackRock but could also potentially usher in a new era of bitcoin investment options.

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