Is Bitcoin Spot ETF on the horizon? BlackRock and Grayscale bring good news, with the crypto market rising first as a sign of respect.

Potential for Bitcoin Spot ETF BlackRock and Grayscale Announce Positive Updates, Boosting Crypto Market Amidst Growing Recognition

Author: Nancy, LianGuaiNews

Waking up on October 24th, cryptocurrency investors in the GMT+8 time zone were shocked to see Bitcoin skyrocketing. Just a few hours ago, there was another development with the Bitcoin spot ETF. American financial lawyer Scott Johnsson tweeted that BlackRock may start preparing seed funding for the Bitcoin spot ETF this month. Following that, Bloomberg’s senior ETF analyst Eric Balchunas also stated that BlackRock’s Bitcoin spot ETF has been listed on the Depository Trust & Clearing Corporation (DTCC), which is a step towards the listing of the Bitcoin spot ETF.

At the same time, according to CoinDesk, the U.S. Court of Appeals for the District of Columbia Circuit has officially ruled on the lawsuit between Grayscale and the SEC. The SEC needs to reconsider the application to convert Grayscale GBTC into a Bitcoin spot ETF.

Multiple processes are progressing smoothly, BlackRock just waiting for SEC approval

Not long ago, a false news of BlackRock’s Bitcoin spot ETF getting approved ignited the sentiment in the cryptocurrency market. Although the news was debunked, BlackRock has come up with good news again a few days later.

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“The S-1 amendment submitted by BlackRock includes the CUSIP number prepared for the issuance of the Bitcoin spot ETF, which is the identification number for all U.S. stocks and registered bonds.” Scott Johnsson also stated in the tweet, “BlackRock may also start preparing seed funding (Seed Capital) for the Bitcoin spot ETF this month.”

According to Eric Balchunas’ tweet, BlackRock recently revealed in its revised documents for the Bitcoin spot ETF that they plan to provide seed funding for the ETF in October. These new pieces of information were not in the original documents, so it is worth paying attention to. However, BlackRock’s plan to provide seed funding for its Bitcoin ETF does not necessarily mean that the company will buy a large amount of Bitcoin. Seed funding is usually just the initial capital to get the ETF up and running. Moreover, BlackRock’s disclosure of this information shows another step in the process of launching the ETF.

It is understood that seed funding refers to the contribution made by banks and brokerages to purchase the constituents (in this case, Bitcoin) in exchange for ETF shares that can be traded on the public market on the first day of listing. Generally, the amount of seed funding is not large, just enough to get the ETF running.

Furthermore, Eric Balchunas also said, “The iShares Bitcoin spot ETF is now listed on the DTCC with the ticker symbol IBTC. This is the first Bitcoin spot ETF to be listed on the DTCC.”

It is reported that DTCC (Depository Trust & Clearing Corporation) is an American trust and settlement company established in 1999. It consists of five clearing corporations and one depository institution and is responsible for providing clearing and settlement services to the financial market.

Although BlackRock’s listing of DTCC and the launch of seed funds do not mean that the ETF has officially launched, the power of life and death is still in the hands of the SEC. However, these smooth progressions send a positive signal to the market, indicating that BlackRock seems to be ready and only awaits the SEC’s approval.

“Either BlackRock has received the green light or they are just assuming and preparing for everything. We still believe that many ETFs will be launched together, rather than BlackRock being the only one approved,” said Eric Balchunas. The reason for simultaneous launches is believed to be the SEC learning from the lessons of the Bitcoin futures ETF. Previously, ProShares took the lead in launching its fund BITO in October 2021, and the huge first-mover advantage made it almost the only player, with a 97% market share.

In fact, BlackRock’s progress with the Bitcoin spot ETF is so fast that it was expected. As a giant in asset management that has a huge impact on the global economy, BlackRock has over 1300 ETFs worldwide. Its success rate for applying for ETFs with the U.S. Securities and Exchange Commission (SEC) is 575:1, showing that it is very familiar with the ETF application process and has a high success rate. Not only that, BlackRock also has significant influence in U.S. politics, with several former employees serving in important positions in the U.S. government and managing the Federal Reserve’s bond-buying program.

Under the good news, the price of Bitcoin once violently broke through $35,000, with a daily peak increase of about 16.3%, but the current increase has narrowed.

GrayscaleEtherETFregistration recognized, calling on SEC for constructive cooperation

In addition to BlackRock, the official ruling by the U.S. court that Grayscale has won the lawsuit against the SEC has also added fuel to the market’s enthusiasm. According to CoinDesk, the U.S. District Circuit Court of Appeals in Washington D.C. has formally ruled on the lawsuit between Grayscale and the SEC, requiring the SEC to reconsider its application to convert Grayscale’s GBTC into a Bitcoin spot ETF. However, at present, the SEC can still choose to approve Grayscale’s application or reject it for other reasons.

After the conclusion of the case on Monday, Jennifer Rosenthal, a spokesperson for Grayscale, issued a statement saying, “The Grayscale team looks forward to continuing constructive cooperation with the SEC to convert GBTC into an ETF. In terms of operations, GBTC is ready and we plan to take action on behalf of investors as soon as possible.”

In addition, a screenshot of a regulatory document from the U.S. SEC shows that the SEC has accepted Grayscale’s filing for a change in trading rules for its Ethereum Trust. Earlier this month, Grayscale Investments, in partnership with NYSE Arca, applied to convert Grayscale’s Ethereum Trust Fund (ETHE) into an Ethereum spot ETF. In response, Nate Geraci, the President of The ETF Store, tweeted that the U.S. SEC has acknowledged the filing of Grayscale’s Ethereum ETF, which will be the process of converting ETHE into an ETF.

As a result of this, CryptoQuant data shows that the Bitcoin premium on Coinbase has increased significantly, with the premium index exceeding 0.45 at one point. The higher the premium, the greater the buying pressure from Coinbase spot purchases.

Meanwhile, Coinglass data shows that the current negative premium rate for Grayscale Bitcoin Trust (GBTC) has narrowed to 13.12%, with the premium rates for ETH Trust at 22.05%, ETC Trust at 45.15%, and LTC Trust at 10.69%.

Latest time points for reviewing Bitcoin spot ETF applications

Although the Bitcoin spot ETF has not been officially approved yet, crypto funds have long been in anticipation, like a drought finally getting rain. Once approved and launched, the spot ETF will attract strong buying power. It is worth noting that the ProShares Bitcoin Strategy Futures ETF previously achieved a trading volume of $1 billion within two days. Especially with the upcoming Bitcoin halving narrative in April 2024, the launch of the Bitcoin spot ETF may attract more capital inflows.

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