According to trading firm QCP Capital, BlackRock’s Bitcoin spot ETF is unlikely in the near term, thanks to SEC Chair Gary Gensler’s attitude towards cryptocurrencies.
The United States Securities and Exchange Commission has taken an increasingly hostile stance against the crypto ecosystem under Gensler.
BlackRock Spot ETF’s SEC Headache
There have been several applications for spot Bitcoin Exchange Traded Funds (ETFs) in recent times. However, all have been rejected by the regulator that is responsible for approving Exchange Traded Funds, the Securities and Exchange Commission (SEC). BlackRock, the world’s largest asset manager, is the latest to apply for a Bitcoin spot ETF. While there is optimism that BlackRock’s spot Bitcoin ETF application could be the first to get approval, an analysis by trading firm QCP Capital has dampened that optimism.
According to QCP Capital’s assessment, a spot Bitcoin ETF, whether BlackRock’s or any other, is not likely in the near future primarily due to Securities and Exchange Commission Chair Gary Gensler and his harsh attitude toward cryptocurrencies. QCP added that while institutional involvement and interest in Bitcoin was bound to increase, the SEC’s current makeup means that it is unlikely that spot ETFs would get the green light.
BlackRock had filed its spot ETF earlier during the month, with a filing by the Nasdaq stock exchange revealing that Coinbase Custody Trust Company would be the custodian of the fund’s Bitcoin holdings, while the Bank of New York Mellon would be the custodian of the fund’s fiat currency.
A Hurdle Called Gensler
The picture is further complicated by current Securities and Exchange Commission Chair Gary Gensler, who has taken a hostile stance against cryptocurrencies in general. Under his leadership, the SEC has initiated several lawsuits against major cryptocurrency exchanges. These include Binance, the world’s largest cryptocurrency exchange, and Coinbase. QCP Capital, in its assessment, wrote,
“However, with Gensler as head of the SEC, we are not confident of the actual ETF approval happening in the near term. Nevertheless, as we’ve continually maintained, there is a huge place for institutional BTC and ETH in the asset management world, and over the next months and years, we will see further steps in that direction.”
QCP Capital’s observation is interesting, especially as it was highlighted that BlackRock had received just one rejection out of a total of 576 prior applications.
Grayscale Bitcoin Trust Rebounds
As a result of the knock-on effects of the BlackRock spot Bitcoin ETF has reflected in Bitcoin’s (BTC) price performance and beyond. The Grayscale Bitcoin Trust (GBTC), having seen a considerable rebound after trading nearly 50% below BTC/USD, has continued to see an upswing as it makes up lost ground. According to data sourced from CoinGlass, Grayscale Bitcoin Trust’s discount to BTC spot (discount to net asset value) reached its smallest level of 2023 at 33.45%. According to QCP, the Grayscale Bitcoin Trust has seen its sharpest recovery since late 2020.
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