In a recent development, global asset management giant BlackRock has submitted an application to create a spot Bitcoin exchange fund, This move by BlackRock spurred many other companies to follow suit.
Since the announcement, the bitcoin price has increased by more than 20%, crossing $30,000.
Several asset managers and companies are now seeking approval from the US Securities and Exchange Commission (SEC) to launch Bitcoin trading funds, inspired by the BlackRock initiative.
Companies vying to establish bitcoin exchange funds:
At BlackRock’s behest, other companies quickly submitted similar proposals to the Securities and Exchange Commission.
WisdomTree, a prominent US-based asset manager, faced previous rejections of a Bitcoin exchange fund but recently filed a new application, apparently encouraged by BlackRock’s actions.
Valkyrie, another well-known asset management firm, has applied to create a Bitcoin exchange fund, joining the growing list of companies seeking SEC approval.
Renewed optimism about bitcoin exchange funds:
Despite past setbacks and regulatory challenges, companies are now showing renewed optimism due to BlackRock’s entry into the bitcoin market.
According to Benner, director of Dabner Capital Partners, a Bitcoin and cryptocurrency fund advisory firm, there have been 30 failed attempts to obtain licenses for such funds.
However, with BlackRock, the world’s largest asset manager with around $9 trillion in management, entering the space, more approvals may be on the horizon.
Penner stated, “Everybody who’s got a file is going to rework it, and those who were considering it will probably submit.”
Reasons for the Bitcoin ETF Rally:
The sudden rush to create Bitcoin ETFs in the US sparked a huge market rally, pushing the price of Bitcoin above $30,000, Speculation suggests that asset managers may have key insights that could lead to approval of their applications.
BlackRock’s request was particularly impressive due to the company’s position as the world’s largest asset manager, with nearly $9 trillion in assets.
BlackRock’s move is seen as a sign that the SEC may finally give the green light to bitcoin exchange funds, despite the regulatory authority’s frequent concerns about risks such as fraud and market manipulation.
According to Nate Geraci, president of The ETF Store, an advisory firm, there have been no indications whatsoever that the SEC is willing to approve bitcoin exchange-traded funds.
However, BlackRock’s actions seem to have changed the landscape, Geraci commented,
“When the world’s largest asset manager takes a step like this, others will notice and will too.”
The recent surge in companies looking to set up Bitcoin ETFs reflects the growing interest and confidence in the cryptocurrency market.
BlackRock’s request has played a pivotal role in encouraging other asset managers to pursue similar initiatives, As the regulatory landscape evolves, it remains to be seen if the SEC will grant approval to these funds, marking a major milestone in the mainstream adoption of Bitcoin and cryptocurrencies.
