BlackRock’s Bitcoin ETF: A Turning Point for Crypto Adoption or Another SEC Rejection?

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The cryptocurrency market experienced a slight shift on Friday as hopes for a potential U.S. Bitcoin ETF by investment giant BlackRock were reignited. CoinDesk reported that the firm planned to offer a Bitcoin ETF, with Crypto Exchange Coinbase acting as custodian. This development was later confirmed when BlackRock’s iShares fund management unit filed paperwork for the formation of the ETF.

According to Sui Chung, CEO of CF Benchmarks, approximately 20% of Americans have owned Bitcoin at some point, which means BlackRock’s proposed ETF could provide the other 80% with a more familiar and accessible option. He adds that BlackRock’s increased engagement highlights Bitcoin’s ongoing appeal to some of the world’s largest financial institutions.

Following this news, Bitcoin swiftly reclaimed its $25,500 level in the early hours of Friday, reversing losses sustained over the previous two days when it dropped as low as $24,860. This move brought some relief to major tokens such as Polygon Network’s MATIC and Cardano’s ADA and led to a nominal increase that mitigated losses from a two-day decline.

In the past 24 hours, Dogecoin (DOGE) led gains among major tokens with a 4% increase, followed by Litecoin (LTC) at 3.3%. Bitcoin’s market strength subsequently impacted shorts, or bets against the cryptocurrency, resulting in over $16 million worth of short liquidations in BTC-tracked futures within the same timeframe. This comparatively modest figure can be attributed to significant declines over the past week, prompting some traders to be more cautious with their capital.

Historically, the U.S. Securities and Exchange Commission (SEC) has turned down numerous attempts from other fund managers, such as Grayscale, VanEck, and WisdomTree, to list a spot Bitcoin ETF. The prominent stature of BlackRock, however, may make it difficult for the SEC to reject the firm’s latest application.

If the SEC were to approve BlackRock’s Bitcoin ETF, it could potentially trigger an outsized rally in the cryptocurrency’s market value. Critics, on the other hand, may argue that the history of rejections from the SEC poses a significant challenge. As the market responds to BlackRock’s application, only time will reveal whether the ETF will receive approval and subsequently impact the future of Bitcoin trading.

Source: Coindesk

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