October 24, 2023

Major Developments in the Bitcoin Spot ETF Landscape: BlackRock and Grayscale Forge Ahead

BlackRock, a global asset management giant, is on the verge of introducing the first-ever Bitcoin spot ETF in the United States. Meanwhile, Grayscale has gained court approval to advance its ETF application.

In the rapidly evolving progress of Bitcoin exchange-traded funds (ETFs), two major players, BlackRock and Grayscale, are making significant strides. These developments have sent ripples through the cryptocurrency market, sparking both excitement and speculation.

BlackRock's Bold Move

BlackRock, the colossal asset management titan with more than $10 trillion in assets under its purview, has set the stage for a groundbreaking move. It appears that BlackRock is on the brink of unveiling the inaugural Bitcoin spot ETF in the United States. The company has taken a crucial step by listing the "iShares Bitcoin Trust" on the Depository Trust & Clearing Corporation (DTCC), which regulates transactions on the NASDAQ exchange. This Bitcoin ETF will be known by the ticker symbol "IBTC".

Notably, Bloomberg ETF Analyst Eric Balchunas pointed out that the choice of the ticker symbol "IBTC" might not be the most exciting, but it does align with BlackRock's established brand, potentially resonating with their affluent clientele. An intriguing development is that this listing marks the first instance of a spot ETF being listed on the DTCC. No other potential ETFs have achieved this milestone. Balchunas noted that BlackRock's proactive approach to logistical aspects such as seeding, ticker selection, and DTCC listing often heralds an imminent launch. Speculation has arisen that regulatory approval for the ETF may be just around the corner.

While questions linger about why BlackRock was prepared in advance, Balchunas speculates that they may have received indications of likely approval or were simply gearing up in anticipation. However, he believes that instead of BlackRock launching in isolation, multiple ETFs will likely debut simultaneously.

BlackRock's Rollercoaster Listing

The journey of BlackRock's Bitcoin Spot ETF listing on the DTCC has been a rollercoaster ride. After its initial listing, the listing was unexpectedly removed, leading to a decline in BTC's price to $33,300. Nevertheless, the latest twist in the story is that BlackRock's spot ETF has once again been listed on DTCC, which coincided with bitcoin's price rebounding above $34,000. This renewed listing has given weight to the idea that approval for BlackRock's spot ETF is imminent.

Bloomberg's ETF expert, Eric Balchunas, commented on these developments, suggesting that BlackRock may have been instructed to wait for the right timing, potentially hinting at a swift approval.

"Yeah, look at this… Good catch, I can't say I'm completely surprised, my guess is that BlackRock was told to wait until it's days, not weeks or months, or they want to wait. As I said yesterday, it was surprising to see this on the list in the first place.”

Grayscale's Court-Backed Push

In a separate development, Grayscale has secured a significant victory in court. The company has received court approval to proceed with its Bitcoin Spot ETF application, which will now be sent back to the SEC. This development marks a significant step forward in Grayscale's ETF aspirations.

The court has issued instructions to the SEC regarding the handling of Grayscale's Bitcoin Spot ETF application. Grayscale intends to list its shares on NYSE Arca under the symbol "GBTC" and issue shares on a rolling basis once they secure approval through form S-3 and a separate 19b-4 filing with NYSE Arca.

It's essential to note that other major asset management players, including BlackRock and Fidelity, are also actively seeking SEC approval for their Bitcoin spot ETFs. The agency is currently navigating a multitude of ETF applications, as confirmed by SEC President Gary Gensler. The rapidly evolving landscape of Bitcoin spot ETFs promises to be a game-changer for both institutional and retail investors, introducing a new dimension to the cryptocurrency market.

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