According to trading firm QCP Capital, BlackRock’s Bitcoin spot ETF is unlikely in the near term, thanks to SEC Chair Gary Gensler’s attitude towards cryptocurrencies.
The United States Securities and Exchange Commission has taken an increasingly hostile stance against the crypto ecosystem under Gensler.
BlackRock's Bitcoin ETF faces a significant obstacle in the form of SEC Chairman Gary Gensler. BlackRock Spot ETF’s SEC Headache
Several applications for Bitcoin Exchange Traded Funds (ETFs) have been submitted recently, but all have been rejected by the Securities and Exchange Commission (SEC), the regulator responsible for approving ETFs. BlackRock, the world's largest asset manager, is the latest to apply for a Bitcoin spot ETF. Although there is optimism that BlackRock's application could be the first to be approved, a trading firm's analysis has reduced this optimism. BlackRock's Bitcoin ETF faces a significant obstacle in the form of SEC Chairman Gary Gensler.
QCP Capital's assessment suggests that a spot Bitcoin ETF, whether BlackRock's or any other, is unlikely to be approved in the near future, primarily due to Securities and Exchange Commission Chair Gary Gensler's harsh attitude towards cryptocurrencies. While institutional involvement and interest in Bitcoin is expected to increase, the current SEC makeup means that spot ETFs are unlikely to be approved.
BlackRock filed its spot ETF earlier this month, with Coinbase Custody Trust Company as the custodian of the fund's Bitcoin holdings and the Bank of New York Mellon as the custodian of the fund's fiat currency.
A Hurdle Called Gensler
The current situation regarding cryptocurrencies is complex, with the Securities and Exchange Commission Chair, Gary Gensler, taking a negative stance towards them. This has led to several lawsuits against major cryptocurrency exchanges, including Binance and Coinbase. QCP Capital has noted that they are not confident about the approval of ETFs in the near future under Gensler's leadership. However, they believe that there is a significant place for institutional BTC and ETH in the asset management world, and we can expect further progress in that direction in the coming months and years. It is worth noting that BlackRock has had only one of its 576 prior applications rejected.
Grayscale Bitcoin Trust Rebounds
The recent launch of BlackRock's Bitcoin ETF has had a positive impact on Bitcoin's price performance. As a result, the Grayscale Bitcoin Trust (GBTC) has seen a significant rebound after trading nearly 50% below BTC/USD. CoinGlass data shows that the discount to BTC spot (discount to net asset value) for the Grayscale Bitcoin Trust has reached its lowest level of 2023 at 33.45%. According to QCP, the Grayscale Bitcoin Trust has experienced its strongest recovery since late 2020.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.