Can BlackRock “Front Run” Bitcoin ETF Approvals? Analyst Clears the Air
With the possibility of Bitcoin (BTC) spot ETFs becoming a reality soon, there are concerns about whether asset managers like BlackRock can use insider knowledge to “front run” their approvals before the funds are launched. In an X space interview, Bloomberg ETF analyst James Seyffart addressed these concerns and explained how BlackRock will handle customers’ claims.
BlackRock’s BTC Position
Seyffart clarified that ETF applicants will only start buying BTC a few days before their funds are launched. This is done to “seed” the ETF with funds in advance so that it can sell shares to investors immediately. He emphasized that BlackRock is not buying Bitcoin on its balance sheets for this purpose.
However, Seyffart mentioned that BlackRock can invest in BTC through other private products like its private Bitcoin trust, especially if its customers are already purchasing BTC ahead of the ETF approval. The excitement around ETF approvals has resulted in record-breaking inflows to alternative Bitcoin funds.
Incoming ETF Approval
Seyffart and other analysts anticipate the simultaneous approval of multiple Bitcoin spot ETFs between January 5 and January 10. The timing of pending comment periods and approval deadlines of rival applicants supports this expectation. However, the derivatives markets are bearish ahead of the approval date, indicating a belief that the approval may be a “sell the news” event.
Hot Take: Will an Approved Bitcoin ETF Flood the Industry with Money?
There are differing opinions on the impact of an approved Bitcoin ETF. While some, like former NYSE president Tom Farley, believe it will lead to a flood of money into the industry, others are more skeptical. Regardless, the potential approval of Bitcoin spot ETFs marks a significant milestone for the cryptocurrency market, opening up new opportunities for investors.
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