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Bitcoin enjoyed a keen price surge recently due to the buzz around the prospect of a Bitcoin ETF. In the space of a few days, it broke through the $30,000 mark after rallying by almost 25%.
Yet, it wasn’t to be. The filing was turned down, price dropped back below $30,000 and hopes of a sparked bull run were parked once again.
So, why the excitement? Just what is a Bitcoin ETF? And how likely are we to see one?
On the last question, most pundits believe it is highly likely before long. One application has already been refiled at the time of writing.
For the reasons outlined below, a Bitcoin ETF represents a major milestone in crypto adoption.
What happened
In June, BlackRock unexpectedly filed for its own Bitcoin ETF.
In recent years, the US SEC (Securities and Exchange Commission) had rejected proposals from all and sundry. But this particular filing caused ears to prick up.
Coming from BlackRock, the world’s largest asset manager ot to mention during an ongoing crypto winter, and in the wake of the SEC’s suit against Coinbase, BlackRock’s custodial partner for the ETF speculation was naturally sparked that BlackRock “may know something.”
This immediately provoked a scramble among BlackRock’s fellow institutional players to file their own applications.
Why the rush? The first approved Bitcoin ETF is expected to come with a significant first-mover advantage, and nobody wants to be left out. And, yet, all filings were rejected.
The SEC told Nasdaq and CBOE the exchanges that filed the paperwork for several of the asset managers, including BlackRock that the applications weren’t sufficiently clear and comprehensive.
However, this is far from the end. The asset managers can update their applications and refile, and as of now, BlackRock and others have already done so.
This all shows just what a Bitcoin ETF will mean to its providers.
But why the excitement in the market? To understand the buzz, a quick explainer on ETFs.
What is an ETF
ETF stands for ‘exchange-traded fund.’ Unlike with crypto, ETFs are traded on traditional stock exchanges, just like any stock.
A Bitcoin ETF would therefore be something of a game changer, drawing the traditional finance world closer with its emerging decentralized alternative, providing exposure to the controversial digital asset class within a traditional context.
ETFs were launched in 1993 and became popular as a means for the normal…
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