- BlackRock, the colossal player in global asset management overseeing a staggering $10 trillion, has set the stage for a financial paradigm shift with its recent strategic move.
- In a groundbreaking late November filing, BlackRock updated its Bitcoin spot ETF protocol, allowing Wall Street banks to become “authorized participants.”
The cryptocurrency market is abuzz as Bitcoin breaches the $40,000 mark, marking a significant milestone not seen since early 2022. Fueling this surge is a groundbreaking move by BlackRock, the world’s largest asset manager, managing an astounding $10 trillion on behalf of its clients.
In a late November filing, BlackRock unveiled a strategic shift that could catalyze a ‘trillion-dollar-plus’ game-changer for Wall Street and the broader cryptocurrency landscape.
The crux of the revelation lies in BlackRock’s amendment to its Bitcoin spot ETF filing. The amendment grants Wall Street banks the role of “authorized participants,” allowing them to navigate the restrictions preventing direct ownership of Bitcoin and other cryptocurrencies on their balance sheets. This maneuver has far-reaching implications, especially as BlackRock competes with industry rivals such as Fidelity, Grayscale Investment, and Franklin Templeton in the quest to launch a Bitcoin spot ETF.
Meetings between BlackRock And SEC
The timing of this move is critical, coinciding with meetings between BlackRock and other contenders with the U.S. Securities and Exchange Commission (SEC). These discussions aim to iron out the intricate details of how these ETFs will function, paving the way for regulatory approval. Sui Chung, CEO at CF Benchmarks, a participant in BlackRock’s Bitcoin spot ETF bid, highlights the significance of this revised dual model.
If accepted by the SEC, it could substantially boost liquidity by broadening the pool of potential authorized participants, particularly with the involvement of large American banks.
In a recent update, SEC Chair Gary Gensler signaled a shift in the agency’s stance on spot Bitcoin ETFs. Gensler revealed that the SEC is taking a “new look” at the numerous filings for a spot Bitcoin ETF, acknowledging the influence of recent court rulings on their decision-making process. This development has sparked speculation that the SEC might be leaning towards approving a fully-fledged Bitcoin spot ETF.
Grayscale Won Against SEC
Notably, asset manager Grayscale secured a legal victory over the SEC earlier this year, compelling the agency to reassess Grayscale’s proposal to convert its flagship Bitcoin trust into a Bitcoin spot ETF. This legal outcome is interpreted by many as an indication that the SEC may be poised to give the green light to such transformative moves in the cryptocurrency market.
As Wall Street giants like BlackRock maneuver to embrace cryptocurrencies, the stage is set for a profound shift that could propel the market into uncharted territory, potentially paving the way for a trillion-dollar-plus game-changer. Investors and enthusiasts alike are closely watching as regulatory developments unfold, anticipating the next phase in the evolution of cryptocurrencies on Wall Street.
