Bitcoin and other cryptocurrencies held steady on Tuesday, with Bitcoin maintaining support above $31,000.
As of Tuesday at press time, Bitcoin was trading at just over $31,000, up 1.2% in the past 24 hours. Ethereum was also little changed, trading at $1,960.
Most other major cryptocurrencies were also flat, holding on to their gains from late June.
Decentralized finance (DeFi) protocol Compound’s COMP token was the best performer among the top 100 cryptoassets by market capitalization, rising close to 58% in the past 7 days. MakerDAO’s governance token MKR was the second-best performer, gaining 49% over the same time period.
BlackRock, the world’s largest asset manager, filed a registration statement with the Securities and Exchange Commission (SEC) on June 29, 2022, for an exchange-traded fund (ETF) that would invest in Bitcoin. The filing caused some confusion because it did not specify whether the ETF would invest directly in Bitcoin or in Bitcoin futures contracts.
Some investors interpreted the filing to mean that BlackRock would be the first major asset manager to offer an ETF that invests directly in Bitcoin. This would have been a significant development, as it would have made it easier for investors to gain exposure to Bitcoin through a traditional investment vehicle.
However, other investors pointed out that the filing did not explicitly state that the ETF would invest directly in Bitcoin. Instead, it said that the ETF would invest in “a basket of assets that track the performance of Bitcoin.” This could mean that the ETF could invest in Bitcoin futures contracts, which are derivatives that track the price of Bitcoin.
The confusion surrounding BlackRock’s ETF filing has led to some speculation that the asset manager may be backing away from its plans to offer an ETF that invests directly in Bitcoin. However, BlackRock has not yet clarified its intentions, and it is possible that the ETF could still be launched in the future.
Here are some of the concerns that have been raised about BlackRock’s ETF filing:
- Compliance with SEC regulations. The SEC has not yet approved any ETF that invests directly in Bitcoin. It is possible that the SEC could reject BlackRock’s filing, or that the ETF could be subject to additional regulations.
- The risk of price volatility. Bitcoin is a highly volatile asset, and its price has fluctuated wildly in recent years. This could make it difficult for an ETF that invests directly in Bitcoin to track the performance of Bitcoin accurately.
- The lack of liquidity. The market for Bitcoin futures contracts is relatively illiquid, which could make it difficult for an ETF that invests in these contracts to trade efficiently.
It is still too early to say whether BlackRock’s ETF filing will lead to the launch of an ETF that invests directly in Bitcoin. However, the filing has certainly generated a lot of interest and raised some important questions about the future of Bitcoin ETFs.
The strong performance of major cryptocurrencies in recent days has come despite concerns about BlackRock’s filing for a spot Bitcoin ETF. The SEC had reportedly said that the filing was not “clear and comprehensive” enough, and other ETF issuers had re-submitted their applications with updated information.
BlackRock’s re-submission of its filing was delayed, leading some to speculate that the firm had lost interest in a Bitcoin ETF.
Overall, the concerns about BlackRock’s filing appear to have been overblown, and the market seems to be confident that the firm is still interested in launching a spot Bitcoin ETF.
