Crypto news: BlackRock is reportedly increasingly confident that the SEC will approve its spot Bitcoin ETF by January, according to anonymous sources at Fox Business.
In fact, it has been a long time already that the odds of approval appear high, so a further increase in these odds means that the confidence level is now very high indeed.
What’s more, BlackRock historically has an approval rate of over 99% for these applications, so a rejection to date seems extremely unlikely indeed.
Crypto news: the January deadline for BlackRock’s Bitcoin ETF
In theory, the final deadline by which the SEC must necessarily let something be known is 10 January 2024.
However, a couple of clarifications should be made.
The first is that this deadline does not concern BlackRock’s application, but that of 21Shares and ARK. However, it must be said that the SEC is unlikely to approve or reject the numerous requests one at a time.
In fact, should it rule only on the 21Shares and ARK application by 10 January, approving it would give this ETF a significant advantage over the others.
In order to avoid benefiting anyone in particular, it is assumed that the SEC opts for a mass approval of all applications with all the necessary requirements to be accepted.
So 10 January 2024 is the real deadline, unless the SEC decides to reject the application of 21Shares and ARK. This scenario seems unlikely, however, since the agency has provided the applicants with feedback to modify the application itself so that it is approvable.
The second clarification is that the SEC could also decide before the deadline.
To be fair, in the past it has almost always taken as long as it takes to issue a verdict in such cases, but for the past few days a window for possible approval has been open that will last until 17 November.
According to some experts in the field, there is a likelihood that approval will occur as early as late December, or early January at the latest.
Crypto news: BlackRock’s request for its Bitcoin ETF
Of all the requests for the issuance in the U.S. markets of an ETF on Bitcoin, BlackRock’s seems to be the one with the highest probability of being approved.
Theoretically, the deadline by which the SEC must necessarily give a final response on this application would be 15 March 2024, but if it were to approve 21Shares and ARK’s application by 10 January it should theoretically also come at the same time as the approval of BlackRock’s application.
It should be specified that BlackRock’s ETF actually turns out to be issued by iShares, and in fact it is called iShares Bitcoin Trust and has IBTC as its ticker.
The rumors provided anonymously to Fox Business would confirm both the assumption that the application of 21Shares and ARK will be approved and that the SEC will rule on it before 10 January. They would also, of course, confirm the assumption that the SEC will go ahead with a mass approval.
This means that by January not only these two applications could be approved, but also many others.
However, BlackRock’s ETF is certainly the most interesting, because it is potentially the one that could reap the most success.
The impact on Bitcoin
It should not be forgotten that spot Bitcoin ETFs must necessarily have BTC as collateral.
This means that the more shares of these ETFs are issued and sold in the primary market, the more the managers of these funds will be forced to buy BTC in the market and immobilize them in cold wallets.
This dynamic will drain BTC from the crypto markets, effectively reducing their supply.
In addition, the fourth halving of Bitcoin will also take place in April next year, halving the premium for miners.
Since part of Bitcoin’s supply in the market is the BTC that miners cash in and sell to finance the high expenses they are forced to incur, halving will also lead to a reduction in the supply of BTC in the crypto markets.
To be fair, all of this is not enough to say that surely the supply of BTC on the crypto markets as a whole will shrink during 2024, but it does lead one to believe that it is very likely to happen.
Should demand not decline proportionately, but remain stable or even increase, the price could do nothing but rise.
The Ethereum ETF
Yesterday, it was reported that BlackRock has just filed an application with the SEC to also issue an ETF on spot ETH.
The price of Ethereum immediately rose, returning close to annual highs, and generating a sharp increase in trading volumes.
In fact, the average gas cost rose as high as 270 gwei, briefly touching levels not seen since June 2022.
A gwei is nothing more than a fraction of ETH, one billionth to be precise, and is used precisely to indicate gas costs, or transaction fees.
Measuring transaction costs in dollars, yesterday the daily average rose above $10 per transaction, with peaks as high as $30. The previous day it was $7, and the day before that it was at $6.
However, it should be mentioned that they have been going up since October 23, probably due to the price increase of ETH. In fact, already on October 24 they had risen to $5.
In other words, yesterday’s bombshell added to a trend that was already upward, and thanks to that ETH was also able to return to its annual highs.