Bitcoin has reached its highest value since last May, following news of progress in the launch of a spot Bitcoin exchange-traded fund (ETF) by BlackRock, the world’s largest asset manager. The updated filing suggests that BlackRock might infuse cash into its iShares Bitcoin Trust as early as this month.
The move to seed the ETF indicates a significant step towards its launch. Seeding involves providing initial funding to purchase a few creation units of Bitcoin in exchange for ETF shares, which can be traded in the open market. This development has generated excitement in the market, with Bitcoin surging by 15% in 24 hours, hitting a peak of $35,000, according to CoinGecko. Other major cryptocurrencies have also experienced gains between 5% and 8% during the same period.
BlackRock initially filed for the spot Bitcoin ETF in June, triggering a wave of similar filings from competitors. While the U.S. Securities and Exchange Commission has previously approved futures-based Bitcoin ETFs, a spot ETF invests directly in Bitcoin, potentially affecting its supply and demand dynamics.
Analysts at JPMorgan predict that the SEC will approve the iSHARES Bitcoin Trust by January 10, as the deadline for a decision on other competing applications approaches. The market sentiment has been affected by recent news, with the combined crypto market cap on the brink of retesting the year-to-date high of $1.28 trillion.
Despite the anticipation, the SEC’s stance on Bitcoin ETFs remains uncertain. Commissioner Hester Pierce expressed frustration, stating that the agency’s approach to crypto-related assets has been perplexing. While Pierce hopes for a more favorable approach, she emphasized the difficulty of predicting the SEC’s decision-making process.
The positive market response to the news is evident, with the gap between the price of BTC and shares in Grayscale’s Bitcoin Trust narrowing significantly. This development suggests a growing confidence in the potential approval of a spot Bitcoin ETF.
