Over the last 11 days, the original crypto coin has risen 20% to two-month highs of $30,182 after BlackRock, the world’s largest asset manager, unveiled plans for a spot bitcoin exchange-traded fund (ETF) in the United States.
Bitcoin, the currency designed to undermine the financial establishment, has recovered from weeks of illness thanks to the backing of Wall Street’s elite.
Over the last 11 days, the original crypto coin has risen 20% to two-month highs of $30,182 after BlackRock, the world’s largest asset manager, unveiled plans for a spot bitcoin exchange-traded fund (ETF) in the United States.
On June 15, BlackRock filed for a prospective spot bitcoin ETF, despite the Securities and Exchange Commission’s (SEC) track record of rejecting every such application. The news helped Bitcoin recover from its slump and end a two-week losing streak.
The notion of an ETF that gives investors exposure to spot bitcoin on a regulated US stock exchange without the inconvenience of custody energizes Satoshi Nakamoto’s rebel child.
According to data tracker CoinMarketCap.com, Bitcoin’s market value has increased to about half of the $1.1 trillion total crypto market, its largest percentage in more than two years. Its share was over 40% at the beginning of the year, up from 34% in 2018.
“The ETF filing news is evidence of adoption and interest from top global players, which is, of course, interesting to institutional investors and traders alike,” said Mikkel Morch, chairman of digital asset investment firm ARK36.
BlackRock’s solid track record of winning the SEC’s approval for ETFs in general, though it hasn’t filed for a crypto one previously, is fueling hope among some crypto proponents. According to Rosenblatt Securities analyst Andrew Bond, it has a 575-1 approval record.
Following the BlackRock submission, Invesco and WisdomTree reapplied for spot bitcoin ETFs after previous applications were denied by the SEC.
The mini-rush of submissions to the US watchdog comes just days after the SEC sued major cryptocurrency exchanges Coinbase and Binance for allegedly violating securities rules, sending shivers through the cryptocurrency sector.
However, not everyone is eager to participate.
“You are aware of the rules of the road in equities and bonds. “However, you don’t know what the rules will be for crypto,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.
“As a result, many people, including myself, have found it difficult to create an investment class.”
Futures contracts are being rolled over.
At the moment, American investors seeking exposure to cryptocurrency on stock markets are confined to futures-based ETFs. These funds track bitcoin futures contracts, which incur additional fees due to contract rollover on settlement days.
ProShares’ Bitcoin Strategy ETF, for example, has gained 62% this year, trailing bitcoin’s 82% gain.
According to Bryan Armour, Morningstar’s director of passive strategies research for North America, a spot bitcoin ETF could be a more cost-effective alternative for investors to trade.
“It doesn’t appear that most crypto ETF holders are institutional – assets are pretty spread out,” he adds.
Crypto investment goods remain a minor component of the entire market. Excluding grantor trusts, which are only available to approved investors, such as the Grayscale Bitcoin Trust, the current crypto ETF market is worth roughly $2 billion, according to MorningStar Direct, accounting for less than 2% of the total crypto market.
BITO, the first bitcoin futures ETF and the first to reach $1 billion in market cap following its launch in 2021, paved the way for a slew of subsequent futures ETFs.
BITO, the first bitcoin futures ETF and the first to reach $1 billion in market cap following its launch in 2021, paved the way for a slew of subsequent futures ETFs.
In a study of 549 worldwide professional investors conducted this year by TrackInsight, J.P. Morgan Asset Management, and State Street, approximately 48% said they would consider investing in single-cryptocurrency exchange-traded products, compared to 37% who were interested in investing directly.
“I’d argue that BlackRock is just as interested in retail as it is in institutional,” Enclave Markets CEO David Wells remarked.
