Bitcoin ETF SEC's Approval Can Triggers Market, Fidelity Joins Filing

Trading News - Over the past weeks, the cryptocurrency world has seen a resurgence with Bitcoin, the pioneer cryptocurrency, taking a considerable leap. It has surged by 20% to achieve a two-month high at $30,182, triggered by Wall Street's enthusiasm about the prospect of a Bitcoin exchange-traded fund (ETF) in the United States.

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In a move that reinforced Bitcoin's foothold in the financial market, BlackRock, the world's largest asset manager, unveiled its plans to file for a prospective spot Bitcoin ETF on June 15, despite the Securities and Exchange Commission's (SEC) history of rebuffing similar applications. The announcement of the ETF filing was a signal of Bitcoin's increasing adoption by top global players, sparking interest among institutional investors and traders.

An ETF would provide investors with exposure to spot Bitcoin on a regulated U.S. stock exchange, without the need to handle the custody aspect. This possibility is energizing the market, stimulating Bitcoin's market value to comprise nearly half of the $1.1 trillion overall crypto market. This is the highest share in over two years, marking a rise from 40% at the start of the year and a low of 34% in 2018, according to CoinMarketCap.com data.

However, the anticipation of Bitcoin ETFs is not without critics. For some, the rules governing the crypto space remain unclear, making it challenging to classify as an investment class. American investors currently interested in crypto are limited to futures-based ETFs. These funds track Bitcoin futures contracts, which involve additional costs of rolling over contracts on settlement days. One example is ProShares' Bitcoin Strategy ETF, which has risen 62% this year, albeit lagging Bitcoin's 82% jump.

While crypto investment products represent a small part of the overall market, the tide is shifting. Other asset management giants, including Invesco and WisdomTree, have followed BlackRock's lead, reapplying for spot Bitcoin ETFs after previous rejections. The fresh wave of ETF proposals comes amid the SEC's legal actions against major crypto exchanges Coinbase and Binance, alleging securities law violations.

Such actions notwithstanding, institutional interest remains. BlackRock's 575-1 ETF approval rate, according to Rosenblatt Securities analyst Andrew Bond, stirs optimism for Bitcoin ETF approval. Furthermore, nearly half of the respondents in a recent survey by TrackInsight, J.P. Morgan Asset Management, and State Street indicated they would consider investing in single-cryptocurrency exchange-traded products.

Fidelity Investments, another major player, is also reportedly preparing to submit an application for a spot Bitcoin ETF. Notably, this will be Fidelity's second attempt following the SEC's denial in 2021. Despite previous rejections, the emerging ETF applications are perceived as a vote of confidence for the crypto space, reigniting retail interest in the industry.

Despite a seemingly tougher stance on crypto companies under SEC Chair Gary Gensler, the approval of the 2x Bitcoin Strategy ETF (BITX) from Volatility Shares might be a sign of a softer approach towards crypto-related ETFs. The approval of BITX has spurred speculation on the potential approval of spot Bitcoin ETFs.

Recent Crypto Surge: Bitcoin Spot ETF Applications Surges Crypto Financial Market

With this changing landscape, it appears that traditional financial institutions' participation in the crypto industry remains strong. The influx of filings for Bitcoin ETFs signifies a promising outlook for the crypto industry, injecting credibility and potential stability into the market. The steady interest from Wall Street could pave the way for Bitcoin's broader acceptance, ultimately reshaping the investment landscape for digital assets.

How Bitcoin Spot ETF Approval May Effct Crypto ?

1. Increased Institutional Adoption and Investor Interest: The move to file for a Bitcoin ETF by prominent asset management companies like BlackRock, Invesco, and WisdomTree can signal increasing institutional adoption of Bitcoin. This can stimulate market interest and attract both institutional investors and traders.

2. Market Stimulation: Bitcoin ETFs would provide exposure to spot Bitcoin on a regulated U.S. stock exchange, which can stimulate the crypto market. In the context of Bitcoin, this has been seen as the cryptocurrency's market value has risen to comprise nearly half of the overall crypto market.

3. Crypto Market Stability and Credibility: The influx of Bitcoin ETF filings can inject potential stability into the crypto market. It also lends credibility to the industry, as these filings are seen as a vote of confidence in the crypto space.

4. Potential for Broader Acceptance: Steady interest from Wall Street in Bitcoin and the possible approval of Bitcoin ETFs could pave the way for broader acceptance of Bitcoin and cryptocurrencies in general. This could eventually reshape the investment landscape for digital assets.

That's TradingNEWS