Can BlackRock Benefit in Advance from the Momentum Before Approval of the Bitcoin ETF?
"According to a recent report from Bloomberg, the possibility of 'pre-positioning' for the approval of Bitcoin exchange-traded funds (Bitcoin ETFs) by BlackRock, one of the world's largest asset managers, has been explored.
.webp "Can BlackRock Benefit in Advance from the Momentum Before Approval of the Bitcoin ETF?")
The questions revolve around whether BlackRock can use internal information to influence the Bitcoin market before the launch of its anticipated funds.
During a panel discussion in the X space on Friday, James Seyffart, an ETF analyst at Bloomberg, provided insights into the nature of BlackRock's operations in the Bitcoin market.
Seyffart explained that ETF applicants usually don't begin buying Bitcoin until days before the launch of their funds, aiming to provide the funds with necessary capital in advance.
According to Seyffart, BlackRock does not specifically target buying Bitcoin in its public budgets to maintain exposure to it. However, the company can invest in Bitcoin through other products, such as its Bitcoin fund, in response to client demands.
The report also points to a significant increase in flows towards alternative Bitcoin funds, including Canadian ETFs and U.S.-based futures-based funds, due to expectations of imminent approval of ETFs.
Seyffart believes the situation is different this time, especially after Grayscale's victory in court against the Securities and Exchange Commission (SEC) in August.
Based on his analysis, Seyffart sees significant chances of approval for ETFs between January 5 and 10.
On the other hand, the report suggests bearish expectations in Bitcoin derivatives markets before the approval date, reflecting market expectations that approval could trigger a 'sell-the-news' event.
However, some, including Tom Farley, former president of the New York Stock Exchange, believe that flows will move into the industry once ETF approval is granted."