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Bitcoin (BTC), the world’s largest cryptocurrency, recently experienced a substantial 12% breakout, reaching a new high for 2023 at $35,000.
This resurgence brings BTC back to levels last witnessed in May 2022, a period marked by the Terra-Luna, Three Arrows Capital, Genesis, and FTX incidents, which had cast a shadow over the crypto industry, causing BTC to approach the $15,000 threshold and prompting doubts about the industry’s survival.
I almost had a heart attack that time when BTC tanked because I bought some satoshis but am thankful I did not hastily cash them out.
However, the sentiment has undergone a remarkable transformation, driven primarily by the anticipation of Bitcoin exchange-traded funds (ETFs) entering the market.
Advocates argue that BTC ETFs could significantly simplify the process of acquiring Bitcoin, potentially expanding the pool of potential investors.
With this recent rally, Bitcoin has extended its year-to-date gains to over 100%, even though it has retraced to around $34,000.
The cryptocurrency market continues to exhibit a “significant uptrend” as the eagerly anticipated Bitcoin ETF inches closer to realisation.
Grayscale, the operator of the largest exchange-traded Bitcoin product, is currently structured as a trust, which has certain limitations.
While the United States (US) Securities and Exchange Commission (SEC) previously rejected its bid to transform the product into a more appealing ETF, a recent court ruling challenged that decision, and the SEC chose not to appeal.
This development heightens the likelihood of Grayscale ultimately achieving ETF status.
In parallel, another significant development has unfolded with the listing of BlackRock’s iShares Bitcoin Trust on the Depository Trust & Clearing Corporation (DTCC).
Bloomberg Intelligence analyst Eric Balchunas posted on X (formerly known as Twitter):
“This is [the] first spot ETF listed on DTCC, none of the others on there (yet). Def notable BlackRock is leading charge on these logistics (seeding, ticker, dtcc) that tend to happen just prior to launch. Hard not to view this as them getting signal that approval is certain/imminent.”
He underscored the DTCC listing as an integral facet within the intricate process of ushering a cryptocurrency ETF into the market.
Notably, the iShares spot Bitcoin ETF is eyeing a potential listing on the Nasdaq stock exchange, having initiated its application for the listing and trading of investment vehicle shares back in June.
He also has raised the possibility that BlackRock may have received preliminary approval from the SEC, or is diligently preparing for such a scenario.
Analyst Scott Johnson has directed attention to two developments that may offer insights into the imminent approval of a spot Bitcoin ETF by the prominent investment firm.
First, he noted that BlackRock has secured a specific “CUSIP” license, suggesting a level of preparation for the launch of their spot ETF product.
Additionally, Scott’s observation indicates that BlackRock may soon initiate the process of “seeding” their spot ETF product with cash, a practice commonly employed to initialise and bolster the fund’s liquidity.
In response to this development, Eric weighed in on the matter, underscoring that the initial seeding of an ETF typically does not entail a substantial financial commitment, just enough to initiate the ETF’s operation.
Nevertheless, he acknowledged that this step is indeed a positive indicator, representing another progressive stride in the intricate journey of launching an ETF.
BlackRock CEO Larry Fink expressed:
“We’re hearing from clients around the world about the need for crypto.”
In accordance with the timing of BlackRock’s application, the SEC holds a window until 10 January 2024, to reach a final determination regarding the ETF’s approval or denial.
In all honesty, I believe that the possible approval of BlackRock’s application could serve as a catalyst, potentially unlocking a wave of spot crypto ETF submissions currently under the SEC’s review, including those from entities such as ARK Investment, Fidelity, and Valkyrie.
Bitcoin led the charge with a significant price surge, but it was not the only digital asset to benefit from the prevailing bullish momentum.
Ethereum’s native cryptocurrency, Ether (ETH), exhibited a 7% increase, while Solana (SOL) saw a remarkable gain of 11%. Dogecoin (DOGE) also joined the upward trajectory with an 8% increase. In contrast, Cardano (ADA) registered a more modest gain of 5%.
*Disclaimer: Cryptocurrency investment is subject to high market risk. The statements made in this article are for educational purposes only and should not be considered financial advice or an investment recommendation. Always DYOR. Never invest more than you can lose — you alone are responsible for your investment.