BlackRock, one of the world’s largest asset management companies, has filed an application for a Bitcoin spot exchange-traded fund (ETF), called iShares Bitcoin Trust. This move has injected new life into the market and triggered a strong rally. There is hope that BlackRock’s application will spark a “massive accumulation race” around Bitcoin. This optimism is fueled by the fact that 69% of all investors have held onto their Bitcoins for over a year and are not willing to sell, according to a report by Bitcoinist.
Market experts believe that the BlackRock ETF has a high chance of approval. Interestingly, BlackRock has a approval ratio of 575:1, while the US Securities and Exchange Commission (SEC) has a rejection ratio of 33:0 for Bitcoin spot ETFs.
BlackRock’s close ties with US regulatory authorities and democratic politicians leave room for an optimistic outlook on the likelihood of approval. According to K33 Research’s latest market analysis, BlackRock is unlikely to invest time and resources if they do not consider the chances of approval to be very high.
The exact deadlines for the SEC’s decision on the iShares Bitcoin Trust are still uncertain. However, there have been rumors that a decision on BlackRock’s ETF filing could be made within “days to weeks,” as reported by NewsBTC. The SEC’s deadlines and decision-making process for the ETF approval are dependent on when the application will be published in the Federal Register for comments, which has not officially happened yet.
Nevertheless, K33 Research has created a rough timeline based on the SEC’s deadlines. The decision-making process follows a pattern of fixed decision dates. After the application is published in the Federal Register, the SEC has 45 days in the first interval to approve, reject, or extend the review of the ETF. Assuming that the application is published on June 29, the first deadline for the SEC would be August 12, 2023. Similar milestones occur 45 days later, 90 days later, and 60 days later.
According to K33 Research, the SEC must make a decision within 240 days at the latest. This means that the market will make a decision no later than February 23, 2024 (subject to slight delays depending on the publication in the Federal Register).
However, while the focus is currently on BlackRock’s ETF filing, there is a possibility that two other institutions may secure approval or at least a decision in their affairs before the world’s largest asset manager. K33 Research shows in their ETF plan that the CBOE has submitted its “ARK 21Shares” to BlackRock and may benefit from BlackRock’s momentum. On May 9, Cboe Global Markets applied for the listing and trading of shares in a spot Bitcoin ETF by Cathie Wood’s Ark Invest and cryptocurrency investment product company 21 on the Cboe BZX Exchange.
Furthermore, Grayscale may receive a final ruling in its legal battle with the SEC before BlackRock. A final decision on Grayscale’s lawsuit may be imminent. The final ruling is expected three to six months after the hearing, which took place on March 7, 2023. The core of Grayscale’s lawsuit is that the SEC acted arbitrarily when it approved futures-based ETFs and rejected spot ETFs.
As K33 Research discusses, all market participants are currently racing for the first-mover advantage. The launch of ProShares BITO has clearly demonstrated this advantage. BITO saw inflows of $1 billion just two days after its launch. To date, BITO has a 93% market share among long BTC futures-based ETFs.
However, whoever wins the race, it seems clear that Bitcoin investors will be the winners. Julio Moreno, Head of Research at CryptoQuant, recently shared a graph and commented, “This is what happens when a large fund [Grayscale’s GBTC] increases Bitcoin demand.”
At the time of writing, the BTC price has paused at over $30,000 after yesterday’s rally and is trading at $30,150.
In conclusion, the filing of an application for a Bitcoin spot ETF by BlackRock has sparked optimism and triggered a rally in the market. While there are still uncertainties regarding the exact deadlines and decisions, the race for the first Bitcoin spot ETF approval is underway, with CBOE and Grayscale potentially securing approvals or decisions before BlackRock. Regardless of the outcome, it is clear that Bitcoin investors stand to benefit from the increased institutional interest.
