One of the biggest catalysts for Bitcoin in 2024 could be spot Bitcoin ETFs. Some believe that these ETFs will bring in enough new investment and hype to propel Bitcoin to new heights. One of the leaders in the race for spot Bitcoin ETF approval is BlackRock. As the world’s largest asset manager, many are looking towards BlackRock to bring Bitcoin to the spotlight and prove that crypto has a place in finance. Let’s take a deeper look at BlackRock and its proposed Bitcoin ETF.
What is the BlackRock iShares Trust?
BlackRock is the world’s largest asset manager. With over $9 trillion in assets, it deals in all areas of finance. It offers financial advice and services to individuals and corporations. However, the iShares branch is a player in Bitcoin ETF.
iShares houses more than 400 unique ETFs, covering nearly every possible investment idea you could have. The ETFs cover different asset classes such as equities, fixed income, commodities and real estate. Additionally, it has a variety of ETFs that focus on ESG investing.
Most of the funds are over 20 years old. With this much experience and knowledge of ETFs, many are looking at BlackRock as the firm to launch the first spot Bitcoin ETF.
How Will BlackRock’s Bitcoin ETF Impact Crypto?
There are two main opinions on how the approval of BlackRock’s spot Bitcoin ETF will impact crypto.
Bulls believe that the ETF will bring in new investors to Bitcoin and drive up the price. For example, a financial advisory firm that was hesitant to deal in crypto directly could then shift its clients' investments into Bitcoin through the ETF. This is just one of the many different types of investors who could theoretically invest in the ETF.
Conversely, bears believe that the ETF is priced in already. They believe this for two main reasons. First, the approval of the ETFs is likely to happen soon. This is a widely held opinion, so they believe that the event is already priced in to the price of Bitcoin. Additionally, the price of Bitcoin has risen substantially over the past month. They cite this as the ETF pricing in before the event actually happens.
How to Buy Bitcoin Today
If you are looking to buy Bitcoin before approval, you can do so through a crypto trading platform. Benzinga recommends Kraken and eToro. These sites are known for their low fees, ease of use and advanced trading features. You can get started on either site for as little as $10.
How Will BlackRock’s Bitcoin ETF Work?
Exidting Bitcoin ETFs use futures to loosely track the price of Bitcoin. However, this has two main issues: the futures do not always match the price of Bitcoin and the active management of the fund results in high fees for the investor.
BlackRock’s Bitcoin ETF hopes to solve both of these problems. It will invest in Bitcoin directly and use this as the asset for the ETF. The Bitcoin it buys will be used to create shares of the ETF, which can then be distributed to investors. By holding Bitcoin directly, it can reduce the fees that are passed on to investors.
To hold the Bitcoin, BlackRock intends to use Coinbase. To track the price of Bitcoin, they will use the CME CF Bitcoin Reference Rate. This rate takes into account the different prices of Bitcoin from a variety of the top exchanges.
When Will BlackRock’s Bitcoin ETF Get Approval?
While there's much speculation around when BlackRock’s Bitcoin ETF will get approval, many speculate that it could happen in 2024. However, some have even more precise predictions. For instance, J.P.Morgan believes that the ETFs will get approval on or before Jan. 10, 2024. The last date for a decision on multiple ETFs after several delays.
However, there could still be more delays. Since these ETFs are so unprecedented, there's a lot more regulatory scrutiny. This forces the applicants to have a much more thorough understanding of their ETF, as well as a longer application process from the SEC.
What Will Happen After Bitcoin ETFs Get Approved?
One thing that could happen after approval is a large amount of capital flows into Bitcoin from new investors. This could range from individual investors to the firms creating ETFs. Additionally, these new investors could continuously trade long after the approval, causing more volatility in Bitcoin.
A potential for spot ETFs for other top cryptocurrencies exists. For example, BlackRock has submitted an application for an Ethereum (ETH) ETF. If the spot Bitcoin ETF goes well, it could open the doors for a handful of other spot ETFs, such as Ethereum and Solana.
About Caden Pok
Caden has been involved with crypto since 2018, when he began investing, trading, and mining tokens. He took part in undergraduate research studying cryptoeconomics at the University of Michigan, where he will graduate Phi Beta Kappa with a bachelor’s in economics in 2025. He is experienced with DeFi technology and multiple blockchains, currently investing in Ethereum and Bitcoin.