Although the SEC has not yet approved BlackRock’s request to issue a Bitcoin spot ETF on US markets, there is important news regarding this.
In fact, as reported by crypto market expert Bloomberg, James Seyffart, in the last 4 days the SEC has once again met with several issuers, including Grayscale and Fidelity.
As for BlackRock, this is the third meeting with the SEC of this kind focused on the request for the issuance of a Bitcoin spot ETF.
Summary
The chances of approval for the Bitcoin spot ETF
The fact that the SEC requests to meet so many times, and in such a short time, with the entities that have applied for the issuance of a Bitcoin spot ETF suggests a certain urgency.
This urgency is due to two factors.
The first is that definitely by January 10th the SEC will have to pronounce in favor or against the request of ARK and 21 Shares.
If this request meets all the requirements to be approved, the SEC will need to ensure that it has all the necessary information to make a decision by no later than January 5th, as that is the date when its examination will presumably begin.
The second factor is that the SEC is unlikely to approve such requests one by one as they expire. For example, the request from BlackRock expires in mid-March.
In order to avoid favoring any single issuer over others, and in particular ARK, the SEC will most likely make a uniform decision for everyone.
The events of the last few days seem to confirm this hypothesis, as the only request in this regard that expires soon is precisely that of ARK.
At this point, it seems rather likely that the agency is trying to gather all the necessary information by January 5th in order to decide on all the requests received regarding the issuance of ETFs on Bitcoin spot.
Furthermore, in the event that it was not oriented towards approving them, it would be very unlikely to proceed in this way. Instead, it seems that this activity is precisely preparatory to approval.
According to some experts, there is about a 90% chance of approval in the first half of January.
The impact on crypto markets
Since approval is considered very likely, at the beginning of January, it is also very likely that the markets have already priced in the news.
Therefore, if the request for ARK were to be rejected, the markets could take it rather badly, while if it were accepted along with all the others, it could even trigger a sell the news, following the buy the rumors of the past months.
However, the real impact will not be reflected in the markets upon the release of the news, but rather in the impact on the supply of BTC on exchanges in the medium/long term.
However, this impact is currently unpredictable because it will depend on the success that such ETFs will achieve in traditional markets, and although there are estimates about it, the actual data is virtually unknown to everyone.
However, if, as many believe, ETFs on Bitcoin spot in the traditional US markets could have great success, especially in the two or three years following approval, the impact on the markets could prove significant.
ETFs on Bitcoin spot, in fact, must be collateralized directly in BTC, which must be immobilized in secure wallets. This means that the more shares of these ETFs are issued, the more BTC will be withdrawn from the crypto markets, directly or indirectly.
SEC: the latest news regarding BlackRock’s ETF
Specifically, regarding BlackRock’s request, some interesting findings have been made by analyzing the SEC notes.
In fact, it has emerged that the company, namely the world’s largest asset manager, intends to make it easier for traditional banks to access their Bitcoin spot ETF.
After all, this is not a product aimed at the retail market, but at the institutional or wealthier citizens market. This is a market that has greater needs, and for which today’s products do not provide sufficient guarantees.
The fact that BlackRock wants to be able to offer Bitcoin, even if through derivatives, to a target audience that has had very little exposure to this new asset class until now, is quite important.
In addition, BlackRock has also improved the description of the details of the ETF share redemption process, for those who wish to return them, making it even easier for the SEC to approve their request.
There is nothing left to do but wait until January to find out if all this will be enough, or if we will have to wait until mid-March.
