Bitcoin Spot ETF Approval: The Race on Who Gets the Upper Hand Just Started
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The last post I wrote about the Bitcoin Spot ETF awaiting approval can be found here. In that post, I wrote that it's now for better or for worse, the Bitcoin Spot ETF approval is upon us whether we like it or not. The probability of getting the BlackRock's Bitcoin ETF approved by the SEC according to analysts is about 95%. But the expectations of many about the Bitcoin Spot ETF approval are on parallel lines. While some are hyped about it and looking forward to making the bank as it's certain in their predictions that BTC would rise exponentially, others are skeptical about it. However, it doesn't matter what anyone thinks, we are in for better or for worse.
Recent development around the ETF approval seems to be interesting. The race on who to get the approval first and get into the market has been intensified. A tweet made available on X (Twitter) by one Eric Balchunas, Senior ETF Analyst for Bloomberg revealed that BlackRock has made a new change to its application by filing a revised Form S-1 for its spot Bitcoin ETF with the SEC, and naming Jane Street Capital and JP Morgan Securities as authorized dealers (APs) for its ETF.
Naming APs before approval may seem like a smart move by BlackRock, and a sign of readiness to storm the market and hit the ground running upon approval. However, the move is somewhat ironic considering JP Morgan CEO Jamie Dimon recently lashed out on crypto and claimed he could close it down if he was the government. This happened just a few weeks ago this December. This seems like BlackRock is setting itself up for a trojan horse battle by naming its direct competitor as AP in its Spot ETF filing.
For those not in the know, AP means an authorized person or institution that has been approved by financial regulators in their respective jurisdictions to act on behalf or represent investment management in the EU. This means, JP Morgan will be one of those that will represent BlackRock interest in the EU to ensure that the ETF comply with the EU regulations requirements and the marketing and distribution of the same within the EU.
A lot of people who comment on Eric Balchunas tweet are of the opinion that with Jamie Dimon as JP Morgan CEO, the company would be acting on achieving their self interest, and thus become a competitor instead of representing BlackRock interest in the EU. Let's not forget that JP Morgan has been building their own Blockchain and looking to get their coins into the market. It will be interesting to see how they can play neutral in their AP role for BlackRock.
While the media was agogated by how the BlackRock injected $10 million in seed capital for the ETF, another applicant for the Bitcoin Spot ETF approval has stepped up the game, to compete with BlackRock. Bitwise, one of the companies that has also submitted an ETF application filing has submitted an updated S-1 form for its spot Bitcoin ETF (BITB), injecting up to a whopping $200 million in seed capital, browning away BlackRock's $10 million.
Now, the race looks set as the horses are lining up at the gate. The competition is going to get more interesting as the proposed day for the SEC to hit the hammer on the bell gets closer. BlackRock might be tempted to up their seed capital, also we have Fidelity's S-1 which included its fee to be 0.39%, the lowest among others so far. Also Jane Street was named as AP. Fidelity is officially set for the race.
Interestingly Invesco/Galaxy brown the table off with their S-1, a whopper no one expects. The fee will be waived for the first six months, for the first $5b in assets, JP Morgan also included in its APs. News about Grayscale, and others amendments are yet to be made public. I am not sure what we should expect to happen to BTC. Only time will tell whether this will take BTC to an unprecedented height or it will be a complete BTC buy over by the traditional financial institutions.
While we may feel excited about these developments surrounding the ETFs approval, it's important not to get our hopes too high, but instead be vigilant. In crypto, anything can happen in seconds, that time is enough to get wrecked or make the bank. Let's keep an eye on the ball!