BlackRock’s Approval of Bitcoin Spot ETF Might Drive $30 Trillion from US Advisors

4:24 am
September 7, 2023
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BlackRock’s application to launch a Bitcoin spot Exchange Traded Fund (ETF) in the US has caught the attention of many, with Bloomberg ETF analyst Eric Balchunas discussing the potential impact. Balchunas suggests that if the US Securities and Exchange Commission (SEC) approves BlackRock’s Bitcoin spot ETF, it could result in around $30 trillion of capital managed by US financial advisors flowing into Bitcoin investments.

It is important to note, however, that Balchunas cautions that not all of the $30 trillion would necessarily move into Bitcoin, as only a fraction of that amount might consider investing. Nonetheless, Balchunas points out that even if just 0.5% of the $30 trillion allocates, it would amount to $150 billion.

The involvement of BlackRock, which manages over $9 trillion in assets, has significantly increased the chances of a BTC spot ETF being approved in the US. Before BlackRock’s entry, the probability of a Bitcoin spot ETF seemed low at just 1%. However, Balchunas revealed that the probability surged to 50% after BlackRock’s application. This also led to a wave of similar filings from other prominent firms such as ARK Investment, Valkyrie, and Fidelity, highlighting the growing competition in the space.

The US already has Bitcoin futures ETFs, which have gained some traction with approximately $1 billion in total assets under management. However, a Bitcoin spot ETF, if approved, has the potential to overshadow futures ETFs and revolutionize the crypto market.

FAQs

What is a Bitcoin spot ETF?

A Bitcoin spot ETF is an exchange-traded fund that allows investors to trade Bitcoin on the open market at its current price and own the physical Bitcoin underlying the fund. This is different from a Bitcoin futures ETF, which relies on futures contracts that speculate on the price of Bitcoin at a future date.

How much capital could flow into Bitcoin if BlackRock’s Bitcoin spot ETF is approved?

If BlackRock’s Bitcoin spot ETF is approved by the SEC, it has the potential to attract around $30 trillion of capital managed by US financial advisors. However, it is important to note that not all of this capital would necessarily move into Bitcoin, as only a fraction of the $30 trillion might consider investing.

What is the significance of BlackRock’s involvement in the ETF space?

BlackRock is one of the largest asset management firms globally, with over $9 trillion in assets under management. Its entry into the Bitcoin spot ETF space has significantly increased the likelihood of approval for such a fund in the US. BlackRock’s involvement has also spurred competition, with other prominent firms filing similar applications in response.

Summary

The possible approval of BlackRock’s Bitcoin spot ETF in the US has captured attention, with the potential to unlock $30 trillion of capital managed by US financial advisors for Bitcoin investments. While not all of this capital is guaranteed to flow into Bitcoin, even a fraction of it could amount to significant investment. BlackRock’s involvement has also raised the likelihood of approval for a Bitcoin spot ETF, triggering increased competition in the market.


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