Will BlockFi be the right one? The rumors are apparently circulating that the US Securities and Exchange Commission will soon approve a spot Bitcoin ETF. With this in mind, the news that the crypto lending platform and investment service BlockFi have just applied for approval has been greeted with suspicion and excitement by the Bitcoin community. Unlike the Bitcoin Futures ETF, a Spot-One requires the company that sponsors it to purchase a large amount of Bitcoin. This will definitely affect the price. However… BlockFi?
Related reading | Bitcoin Futures ETF exceeds expectations, trading $ 1 billion on day one
Last year, hackers targeted BlockFi and stole sensitive user data, including their customers’ activity history. To make the breach worse, the hackers used a simple SIM swap to breach their security, and the company didn’t reveal the hack until days after the incident. More recently, supervisory authorities from five states accused the controversial lending platform of violating security laws with their BlockFi interest account product. In a statement on the issue, the company said:
“BlockFi’s BIAs have been the subject of recent activity by securities regulators in New Jersey, Texas, Alabama, Vermont and Kentucky, and we are in an active dialogue with these regulators. We believe that our products and services are lawful and appropriate for crypto market participants, and we stand by our commitment to protect consumers’ right to earn interest on their crypto assets. ”
In any event, past performance does not guarantee future results. And BlockFi could score big if they are the chosen one. The first Bitcoin ETF is expected to break all kinds of records, but let’s not be hasty.
BTC price chart for 11/09/2021 on Oanda | Source: BTC/USD on TradingView.com
What do we know about BlockFi’s version of a Bitcoin ETF?
Not much, actually. The project is a joint venture with the investment company Neuberger Berman. If approved, it will be traded on the New York Stock Exchange. It reflects “the performance of the bitcoins held by the trust, minus the trust’s expenses and other liabilities.” Yes, the registration statement actually says “Bitcoins”, but let’s go through them for now. What else does the document reveal? Fountain…
“Subject to liquidation or exceptional circumstances, the Trust will not buy or sell Bitcoin directly, although the Trust may instruct the Custodian to sell Bitcoin in order to pay certain costs. Instead, when the trust sells or redeems its shares, it will do so in the form of in-kind transactions in blocks of  Shares (a “Creation Basket”) based on the amount of Bitcoin that can be assigned to each share (…). Since the creation and redemption of creation baskets in the form of transactions in kind are based on the amount of Bitcoin attributable to each share, the amount of Bitcoin in creation baskets created or withdrawn in this way is generally not influenced by fluctuations in the Bitcoin value. ”
In any case, there is no guarantee that BlockFi will win the coveted first place. The amount of ETF fills related to Bitcoin is actually getting ridiculous.
Who is Next on the SEC’s Bitcoin ETF List?
The list provided by Bloomberg Intelligence’s James Seyffart shows 21 hopeful spot Bitcoin ETFs and even more derivative-based ones. That includes the BlockFi Futures ETF that the company filed last month. Here is the list.
Here is the current list of #bitcoin and crypto ETF filings with the SEC. The next big date is still 11/14/21 for VanEcks Spot Bitcoin ETF. It will be either a SEC approval or a denial – no more delays. https://t.co/Z8phpVlsOK pic.twitter.com/g9ayoibmQN
– James Seyffart (@JSeyff) November 8, 2021
According to the expert, “the next big date is still 11/14/21 for VanEck’s spot Bitcoin ETF. It will be either a SEC approval or a denial – no more delays. ”Will VanEck be the chosen one? We’ll have to wait and see, but Seyffart believes it won’t. He tweeted, “We fully anticipate a rejection based on recent SEC / Gensler comments. Would be shocked if VanEck approves the filing (although she thinks it should be approved). BUT, the rejection letter should give us insight into the current views / opinions of the SEC. ”
Related reading | Bitcoin ETF inflows are slowing as interest in altcoins rebounds
Chances are that all approved Bitcoin ETFs will make tons of fiat money, but the first mover advantage in a product as expected as this is worth millions of dollars. Billions even.
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