The podcast discusses the recent application by BlackRock for a Bitcoin spot ETF and the implications it has for the crypto market. The speakers discuss the SEC’s history of rejecting Bitcoin spot ETF applications, the unique aspects of BlackRock’s application, and the potential impact of a Bitcoin spot ETF on the market.
- SEC’s Rejection of Previous Bitcoin Spot ETF Applications: The SEC has rejected all previous Bitcoin spot ETF applications due to concerns about the underlying spot market and the lack of surveillance-sharing agreements.
- BlackRock’s ETF Application: BlackRock’s application is different because it includes a 19b-4 filing, which is a rule change proposal. The timing of BlackRock’s application, amidst the SEC’s enforcement actions against major crypto exchanges, suggests that BlackRock might have some insider knowledge.
- First-Mover Advantage in the ETF Market: Being the first to launch a Bitcoin spot ETF would give BlackRock a significant advantage in the market.
- Coinbase as BlackRock’s Custodian: BlackRock has chosen Coinbase as its custodian, which is seen as a risk given the ongoing legal battle between the SEC and Coinbase.
- Spot Bitcoin ETF vs. Bitcoin Futures ETF: A spot Bitcoin ETF, which directly tracks the price of Bitcoin, is preferred over a Bitcoin futures ETF, which tracks the price of Bitcoin futures contracts.
- Other ETF Applications: Other firms, including Invesco, WisdomTree, and Valkyrie, have also filed applications for Bitcoin spot ETFs.
- Grayscale’s Lawsuit Against the SEC: Grayscale has sued the SEC over the denial of its proposal to convert GBTC to an ETF. If BlackRock’s ETF is approved, Grayscale would theoretically be able to convert GBTC to an ETF.
- Gary Gensler’s Position: Gary Gensler, the chairman of the SEC, could be thinking like a politician in relation to spot Bitcoin ETFs. If BlackRock’s ETF is approved, it could potentially make Grayscale’s lawsuit irrelevant.
- Neutral to Bullish Sentiment: The speakers discuss the potential benefits of a Bitcoin spot ETF and the possibility of BlackRock’s ETF being approved. However, they also highlight the risks and uncertainties involved, including the ongoing legal battle between the SEC and Coinbase, and the potential impact of Grayscale’s lawsuit against the SEC.