BlackRock and Financial Giants See Profit Potential: Spot Bitcoin ETFs Spark Interest Amidst Crypto Volatility

• BlackRock (BLK) recently submitted an application for a bitcoin exchange-traded fund (ETF). 

• Since Tuesday, when U.S. markets resumed trading after an extended holiday weekend, BTC has experienced a growth of over 12%.

Financial institutions are showing renewed interest in cryptocurrencies and eagerly entering the market. BlackRock (BLK) recently submitted an application for a bitcoin exchange-traded fund (ETF). This week, another substantial asset manager, Invesco (IVZ), also reapplied for regulatory approval to offer a Bitcoin ETF. Additionally, WisdomTree, a notable ETF sponsor, resubmitted their filing for a spot bitcoin product (their previous filing was rejected by the SEC in 2022).

It is quite intriguing why the $10 trillion asset manager BlackRock and the $1.5 trillion asset manager Invesco reconsider the spot Bitcoin ETF. Various intricate and speculative theories have been put forward. Several theories have come up, and I can say they are quite interesting. One of the theories that have caught my eye is BlackRock is hastily working to provide backup support for Coinbase. 

Among the numerous theories circulating, here’s a more straightforward one: Just like anyone else, financial institutions have a keen interest in making money, and offering a spot in Bitcoin ETF presents an opportunity for them to do so. It is worth noting that for BlackRock to generate profits from this ETF, it must receive approval. 

Up to this point, the Securities and Exchange Commission (SEC) has rejected approximately twelve applications for spot bitcoin ETFs. However, there are indications that BlackRock’s recent application may meet the SEC’s market surveillance and disclosure criteria, raising optimism for its potential approval.

Bitcoin Maintains Stability Above $30K Amidst Spot Bitcoin ETF Applications

Following two days of rapid growth driven by the excitement surrounding spot bitcoin ETFs, the price of bitcoin (BTC), the leading cryptocurrency in market capitalization, reached a plateau. BTC was recently trading at approximately $30,000 when investor optimism soared upon the news of three major financial services players, including BlackRock, the world’s largest asset manager, submitting applications for BTC spot ETFs. 

On Thursday, bitcoin briefly dipped to around $29,893 after cryptocurrency custodian BitGo canceled its acquisition of rival Prime Trust, presenting a rare setback amidst an otherwise positive week. Since Tuesday, when U.S. markets resumed trading after an extended holiday weekend, BTC has experienced a growth of over 12%.

The submission of spot bitcoin ETF filings to the U.S. Securities and Exchange Commission (SEC) by three major financial services giants, including BlackRock, the world’s largest asset manager, has bolstered investor sentiment. Additionally,  this comes as a relief to investors who faced turbulence earlier this month when the SEC filed lawsuits against prominent exchanges such as Binance and Coinbase.

Ether (ETH), the cryptocurrency ranked second in market value, experienced a similar trajectory to BTC, showing a temporary decline around the time of the BitGo announcement shared on Twitter. However, it recovered and was recently trading near the $1,900 mark it reached on Wednesday, marking its return to this level for the first time since the start of June. ETH has seen a slight increase of a few fractions of a percentage point.