BlackRock Gets SEC Approval for Bitcoin ETF

The United States Securities and Exchange Commission (SEC) has given BlackRock the green light to offer options trading for its spot Bitcoin ETF (exchange-traded fund).

On Friday, September 20, the SEC announced
the approval of options trading for the iShares Bitcoin Trust (IBIT) on Nasdaq. This approval comes approximately eight months after the SEC initially approved the launch of spot Bitcoin ETFs, including those from BlackRock and several other firms.

Implications and Opportunities for Bitcoin ETF

The launch of BlackRock’s spot Bitcoin ETF in January set the stage for this recent development. Options trading allows investors the flexibility to buy or sell Bitcoin at a predetermined price and date, essentially enabling sophisticated trading strategies. This SEC approval is not only a significant milestone for BlackRock but also for the entire cryptocurrency market.

BlackRock Sets Precedence in Crypto ETFs

The SEC’s notice indicates a broader acceptance of Bitcoin ETFs in traditional financial markets. As more firms follow suit, we are witnessing a major shift in how digital assets are perceived and traded.

Source: SEC

Besides BlackRock, other asset management firms like Grayscale and Bitwise are also gearing up to launch spot Bitcoin ETFs. Bloomberg analyst Eric Balchunas predicted that these companies will likely gain SEC approval shortly, making the market more competitive.

“Huge win for the bitcoin ETFs (as it will attract more liquidity which will in turn attract more big fish). This is a nice surprise regarding timing but not a shocker as James Seyffart and I gave 70% odds of approval by the end of May.” – Eric Balchunas

The Road Ahead for Spot Bitcoin ETFs

Nate Geraci, president of ETFStore, also commented on the approval, indicating the next steps in the evolution of spot Bitcoin ETFs.

Remember, spot btc ETFs have taken in a net $18bil in 8 months…

With no options trading, no in-kind creation & redemption, & limited approval on major wirehouse platforms (plus no access on Vanguard).

Monumental success w/ one hand tied behind back.

— Nate Geraci (@NateGeraci) September 20, 2024

According to Geraci, the next major development will be the introduction of in-kind creation and redemption. This process allows large investors to exchange Bitcoin directly for ETF shares, making the trading process more efficient and reducing investment costs.

An in-kind creation and redemption mechanism would significantly enhance the attractiveness of spot Bitcoin ETFs, drawing more institutional and retail investors into the market.

The price of Bitcoin on the daily timeframe | Source: BTCUSDT chart on TradingView

Featured image created with Dall.E, chart from TradingView

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