BlackRock, the colossal asset manager, is taking significant strides towards the creation of a Bitcoin ETF, potentially marking a crucial milestone for the institutional adoption of this cryptocurrency. With over $9 billion in assets under management, the company intends to acquire $10 million in BTC as part of the initial funding. This move was initially scheduled for January 3 but was later postponed to January 5.
Bloomberg analyst James Seyffart notes that this BTC purchase is essentially a “pre-seeding” for the ETF, signaling BlackRock’s readiness to dive into the cryptocurrency market. However, he emphasized that this action does not necessarily guarantee the immediate launch of the ETF, as it might be part of a strategy to anticipate a near-future launch.
UPDATE: @BlackRock already submitted an updated/amended S-1 for their #bitcoin ETF. pic.twitter.com/sVAL9qVmiy
— James Seyffart (@JSeyff) December 22, 2023
The chosen date for the purchase, January 3, initially suggested a symbolic connection to Bitcoin’s genesis block, marking the network’s start exactly 15 years ago. While this date was subject to speculation, the essential aspect is BlackRock’s preparedness to back its ETF with a substantial initial investment.
BlackRock Faces Tough Competition
The financial giant’s move is not without competition. Other asset managers, like Bitwise, are also in the race to launch their ETFs. In fact, Bitwise has filed an application suggesting the possibility of seeding its fund with up to $200 million, a significantly larger amount than BlackRock’s planned investment. This competition among asset managers demonstrates the growing interest and acceptance of cryptocurrencies as a legitimate asset class.
Beyond the specific investments of BlackRock and its competitors, attention is focused on the role of the SEC. James Seyffart, drawing on the recent Grayscale case, argues that the regulatory body is backed into a corner and is likely to approve these funds. The official decision is expected to be announced between January 8 and 10.
The substantial investments in BTC reflect a significant shift in the perception of cryptocurrencies in the conventional financial realm. The upcoming days will be pivotal for the industry’s future. 2024 could witness a turning point in the digital ecosystem and crypto investments.
