Today, we will review the Bitcoin ETF application of BlackRock, one of the largest asset management companies in the world.
Let’s take a look at how the ETF applications made by different companies were evaluated, what is an ETF, what kind of movements can be observed in the markets if the ETF application is approved.
BlackRock Files For Bitcoin ETF
Asset management firm BlackRock took an important step yesterday by filing a Bitcoin ETF application with the US Securities and Exchange Commission (SEC). According to the statement, the application was made by BlackRock’s iShares subsidiary. In the application, Coinbase was shown as the company to which the funds will be entrusted, while it was stated that if the ETF was approved, it would start trading on the Nasdaq.
This move, which was positively received by the crypto money market, caused corrections in the prices of crypto assets, which were on the decline yesterday.
Galaxy Digital CEO Mike Novogratz thinks this move is the best thing that has ever happened to Bitcoin, while the ETF is seen as unlikely to be approved. Because none of the previous Bitcoin ETF applications have been positive in the US. Despite more than 30 applications filed by companies, the SEC rejected the applications, citing the market’s immaturity and lack of investor protection.
The fact that Coinbase was selected as the custodian company in the application also increases the likelihood of rejection of the ETF application. As you know, the SEC recently sued Binance and Coinbase for violating securities laws.
What is an ETF? What About Previous Applications?
Now, let’s take a look at what the Bitcoin ETF is, which companies have applied before and how they got answers.
ETF is called Exchange Traded Fund or Exchange Traded Fund. To put it briefly and clearly, ETF refers to ordinary mutual funds traded in the stock market.
Grayscale Investments, one of the most persistent companies to issue a Bitcoin ETF, has applied to the regulator to convert Grayscale, Bitcoin Trust product into a physically stored spot ETF. However, the regulatory body turned down this request. Grayscale, on the other hand, sued the regulatory agency and continues its legal fight for the Bitcoin ETF.
Apart from Grayscale and BlackRock, ARK 21 Shares was also among the companies that applied for a Bitcoin ETF. However, the application was rejected on the grounds that the company did not meet the sufficient conditions. VanEck, which has also applied for a Bitcoin ETF before, is among the companies that received rejection from the regulatory agency. VanEck has applied for a Bitcoin ETF three more times before, and all of these applications have been rejected. As I just mentioned, the SEC has so far rejected more than 30 Bitcoin ETF applications.
How does the Approval of the Application Reflect on the Markets?
First of all, in this process of market uncertainty, this application by BlackRock was a morale booster for the cryptocurrency markets. Many investors and experts stated that this move is a very important one. The fact that institutional investors continue to be interested in Bitcoin in this process also creates an environment of trust about the crypto asset.
Approval of BlackRock’s ETF could help legitimize the cryptocurrency market and attract more institutional investors. However, the decision to apply for an ETF may take some time. The SEC can extend the review period up to 240 days from the day of filing before making a final decision on applications.
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