In recent revelations, renowned crypto reporter Colin Wu from the X platform revealed that financial titan BlackRock has initiated seeding its much-anticipated Bitcoin ETF this October. As excitement builds over the potential approval of several Bitcoin ETFs, the market responds with notable vigor.
BlackRock stating in their recent spot Bitcoin ETF amendment that they are seeding the ETF in October. Seeding an ETF is when initial funding is provided (typically) by a bank or broker dealer used to purchase a few creation units (in this case bitcoin) in exchange for ETF shares…
— Wu Blockchain (@WuBlockchain) October 24, 2023
Seeding an ETF is akin to laying the first brick for a mammoth construction. It involves an initial capital infusion, often provided by a bank or broker-dealer, to kickstart the ETF. In BlackRock’s case, this would mean purchasing Bitcoin in return for ETF shares, which are then traded on the open market from day one. While seeding doesn’t involve massive sums, it’s pivotal for propelling the ETF into active trading.
Bloomberg’s Eric Balchunas noted that the iShares Bitcoin Trust, a product of BlackRock, is now listed on the DTCC (Depository Trust & Clearing Corporation) – a fundamental step in the ETF’s journey to market approval. While this doesn’t guarantee an imminent green light, it’s an optimistic indication, especially with the chosen ticker being $IBTC.
The iShares Bitcoin Trust has been listed on the DTCC (Depository Trust & Clearing Corporation, which clears NASDAQ trades). And the ticker will be $IBTC. Again all part of the process of bringing ETF to market.. h/t @martypartymusic pic.twitter.com/8PQP3h2yW0
— Eric Balchunas (@EricBalchunas) October 23, 2023
Consequently, Bitcoin’s value catapulted, marking a 1-1/2 year high, registering a trading peak of $34,283 and settling around $32,833. Following Bitcoin’s lead, crypto-centric stocks like Coinbase Global, Marathon Digital, and MicroStrategy also witnessed impressive gains, further fueled by after-hour U.S. trades. Ethereum, Bitcoin’s closest competition, wasn’t left behind, enjoying an 8% surge during this press.
A Bitcoin ETF is not just another financial product; it’s seen as a conduit for broadening the cryptocurrency’s investor base. It offers an avenue for a broader spectrum of investors to gain exposure to Bitcoin without the need to trade it directly. Matthew Dibb, CIO at Astronaut Capital, highlighted the market’s attempt to preempt the Bitcoin ETF approval, as per a Reuters report, which many speculate could be realized in the next quarter.
BlackRock isn’t alone in this race. Heavyweights like VanEck, WisdomTree, Fidelity, Bitwise, and Invesco are all awaiting the nod for their Bitcoin ETF applications. But Blackrock’s iShares ETF listing on DTCC’s website has propelled it to the forefront of speculations. Bitcoin’s price stands at $34,424.16, marking an 11.59% increase in the past 24 hours. Its market cap is $672 billion, maintaining its #1 position on CoinMarketCap.
