After contentious rumors and a re-filing with the U.S. Securities And Exchange Commission (SEC), major investment management firm BlackRock’s proposal to launch a long-awaited Bitcoin ETF may soon meet regulatory approval.
One of the most anticipated developments in the world of Bitcoin financialization is the concept of the Bitcoin ETF, which has yet to be approved for the U.S. financial ecosystem. Essentially, an ETF (exchange-traded fund) is a pooled investment security, a financial instrument that ties its value to that of some external source like a collection of commodities, stock indices or other types of asset. In other words, a Bitcoin ETF would be a security that corporate and individual investors could purchase to speculate on Bitcoin’s success without actually owning the crypto asset directly.
Although the number of people getting into Bitcoin and cryptocurrency has gone up over the years, a Bitcoin ETF would make the leading cryptocurrency vastly more accessible and potentially give millions of new investors skin in the game. Understandably then, the possibility of such a product becoming a reality has been making headlines for years, and while many have filed for regulatory approval of Bitcoin-focused ETFs, none have been approved by regulators in the U.S.
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But the entrance of BlackRock as the latest financial firm to submit a Bitcoin-focused ETF proposal to the SEC, is particularly notable. This leading legacy firm has a near-perfect track record in obtaining ETF approvals. Following initial document filing for a spot Bitcoin ETF last month, the cryptocurrency market seemed to take heart, with bitcoin reaching one-year highs shortly after the application.
Although the SEC has long signaled concern over the volatility of crypto assets, momentum now seems to favor bitcoin, with BlackRock potentially offering a product never seen before in the space. Although many comparisons can be made between this and previous existing products, an approval here could mark a new era for mainstream acceptance of Bitcoin.
As the bitcoin price appears to be rallying merely from the rumor of such a product, it seems likely that an actual approval would bring even more price momentum. - Nasdaq
