BlackRock’s Bold Move: Simplifying Banks’ Entry into Bitcoin

The crypto world is anticipating the SEC’s call on Bitcoin ETFs. Big names like Grayscale, Bitwise, VanEck, and more are on edge, knowing their future moves ride on this decision. With Blackrock in the running for approval, all eyes are on the January verdict and what it means for crypto investments. 

BlackRock’s Change of Mechanics, Will it Hit Bull’s Eye?

Within this context, BlackRock’s 3rd strategic revision of its Bitcoin ETF proposal emerges as a breaking point. Notably, the updated model aims to simplify participation for influential entities like JPMorgan and Goldman Sachs, enabling them to access the ETF using cash rather than handling cryptocurrencies directly. This bold move is a response to regulatory hurdles preventing these institutions from holding Bitcoin directly on their balance sheets.

BlackRock revises spot Bitcoin ETF to enable easier access for banks. Under the revised model, APs would transfer cash to a broker-dealer, which then converts the cash into Bitcoin before it is stored by the ETF’s custody provider, which is Coinbase Custody in BlackRock’s case. This reshaped model seeks to mitigate risks for APs while transferring them to market makers. BlackRock underlines its enhanced resistance to market manipulation—a primary concern previously raised by the SEC. It promises bolstered investor protection, reduced transaction costs, and streamlined operations within the Bitcoin ETF ecosystem. 

SEC Engagements and Final Deadlines

BlackRock’s recent engagements with the SEC, including a third meeting on December 11, underscore the urgency surrounding the forthcoming decision. The SEC faces a crucial deadline to decide on BlackRock’s application by January 15, with a final cut-off on March 15.

The clock is already ticking and Industry analysts eagerly await the SEC’s expected ruling on several spot Bitcoin ETF applications between January 5-10. Should BlackRock receive the green light, it could reshape the crypto landscape, providing a smoother avenue for traditional financial institutions to enter this burgeoning market.

Multiple Approval On the Final Leg, Analyst Claims otherwise?

As the world awaits BlackRock’s fate, there’s newfound hope for SEC approval of spot Bitcoin ETFs, potentially transforming the digital assets sector by attracting more retail investors. Until now, market-making firms like Jane Street, Jump Trading, and Virtu were expected to be major participants. But with banks now entering the picture, it could expand the number of liquidity providers. This change might give banks a share in the action. 

As per schedule, Bitcoin ETFs might get SEC approval by January’s end, but Bloomberg’s ETF analyst James Seyffart suggests a potential delay in their actual listing. Seyffart hints at uncertainty, indicating a possible gap between approval and public listing, extending beyond the initial approval period.