Wall Street Giants Seek Approval for Bitcoin ETFs Amidst Crypto Industry Turmoil
The recent regulatory crackdown has not scared Wall Street asset managers like BlackRock, Fidelity and Invesco from applying to list spot Bitcoin (BTC) exchange-traded funds (ETFs), with experts now estimating a 50% chance of approval.
The race to launch an ETF is led by Cathie Wood’s ARK Invest and 21Shares, which are seeking to list its product with the ticker ARKB on the CBOE exchange.
The final deadline the SEC has for either approving or denying that listing is January 10, 2024, with multiple earlier deadlines extended coming up before that, according to Bloomberg Intelligence.
The ETF sponsored by BlackRock, which is the one that brought new optimism that a spot ETF could be approved, has a final deadline on March 15 the same year.
50-50 odds of approval
Notably, Bloomberg’s own team of ETF analysts now estimate that the odds a spot Bitcoin ETF will be approved by the SEC is 50-50.
“The SEC has denied such proposals for years, but its recent call for more details signals a greater willingness to engage with applicants,” wrote Bloomberg Intelligence ETF analyst James Seyffart in a recent update.
BlackRock ETF filing boosts Bitcoin
The filing of BlackRock’s ETF application with the Securities and Exchange Commission (SEC) on June 16 has already led to a massive rally for Bitcoin, despite no confirmation or even indication from the SEC that the application will be approved.
Instead, it appears traders are betting that BlackRock, a Wall Street heavyweight with deep political connections, has the influence in Washington that is needed for its application to be approved, regardless of past rejections.
Since June 16, the spot price of Bitcoin is now up by about 22%, from less than $25,600 on the day of the filing to $31,300 as of today, indicating just how bullish the market sees an ETF filing from the firm.
Experts predict positive outcome
Earlier this month, Sui Chung, CEO of the crypto index provider CF Benchmarks, revealed that he is “very optimistic” about the SEC finally approving a spot Bitcoin ETF with all of the new filings that are now on the table.
“We are very optimistic that approval will be granted by the SEC because the SEC has consistently stated that it wants to see certain safeguards in place,” Chung said, while pointing to information-sharing agreements between the listing exchange and crypto exchanges as a key safeguard.
“That bar has been very clear, and we believe that bar has been met by the provisions that collectively we have all put in place,” the CF Benchmarks CEO added, likely referring to agreements between Coinbase and major asset managers about market surveillance.
Meanwhile, Grayscale CEO Michael Sonnenshein has also said recently that he is optimistic about a spot Bitcoin ETF approval.
“Today we have a market of multiple bitcoin futures-based ETFs. [...] At Grayscale, we've long been prepared for a marketplace of multiple spot bitcoin ETFs,” he said in a Bloomberg TV interview, while adding:
“When I really zoom out and look at how much progress has been made [...] I do think we are at a pivotal moment.”