Bitcoin

<p>Yesterday, 29 June, asset manager Fidelity refiled their spot Bitcoin ETF (Exchange Traded Fund). Their previously-rejected reapplication comes about two weeks after BlackRock sent their own ETF application to the Securities and Exchanges Commission (SEC). <br /><br />On 15 June, the huge US asset manager, BlackRock, filed for a spot Bitcoin ETF. This move sparked a flurry of ETF filings and crypto custodian applications from major TradFi institutions around the world. Although futures Bitcoin ETFs have been approved in the past, spot Bitcoin ETF applications have proved elusive. The SEC has repeatedly rejected filings for over a decade now.<br /><br />However, with BlackRock’s track record of success (575 approvals vs 1 rejection), and the slew of similar applications that followed from other traditional finance institutions, many speculate that these trillion dollar asset managers will soon be able to offer the Bitcoin investment vehicle to their clients.</p><p>And although Satoshi Nakamoto might be rolling his eyes at the news, having developed Bitcoin as a direct result of the 2008 financial crisis, TradFi getting their hands on the <a href="https://cryptology.com/trading/BTC_USD" rel="noopener noreferrer nofollow">leading cryptocurrency</a> may be a positive development for the wider crypto market.</p><h2 id="header-0">The spot Bitcoin ETF avalanche</h2><p>After news broke of BlackRock’s ETF application, WisdomTree, Invesco and now Fidelity, followed suit, quickly filing or refiling their own ETF applications to the SEC.</p><p>As a result, Bitcoin’s price soared by approximately 20% hitting a local high and breaking the $30K resistance level. This corrected the damage done from the previous week’s news of the SEC suing both Binance and Coinbase for operating exchanges that traded unregulated securities, which made the market dump considerably. </p><p>Deutsche Bank also joined the fray, applying for a digital asset license in Germany. The banking giant announced their plans to become an official crypto custodian. Pending regulatory permission, the move would allow Deutsche Bank to buy and sell cryptocurrencies through prime brokers and even provide services such as:</p><ul><li>Fund administration</li><li>Valuation services</li><li>Taxation</li><li>Staking</li><li>Lending</li><li>And voting.</li></ul><h2 id="header-1">The big question is; will BlackRock be approved?</h2><p>The majority of the TradFi and crypto communities are optimistic about BlackRock’s chances of approval. A lot of this sentiment stems from their high hit rate with the SEC, as previously mentioned. But even more so, it’s the new details in their application.</p><p>The key difference in BlackRock’s filing this time round, is that it includes a surveillance sharing agreement (SSA). The Nasdaq exchange, where BlackRock’s iShares Bitcoin Trust would be listed, would enter into an SSA with a US-based Bitcoin spot trading platform, which would help protect investors against fraud and market manipulation.</p><p>Many have suggested that the new EDX Markets exchange that recently launched, could be the very solution to satiate the SEC and gain their green light.</p><h2 id="header-2">EDX Markets launch new crypto exchange</h2><p>Alongside the BlackRock filing, news broke of EDX Markets launching its digital asset platform. Backed by TradFi heavy hitters such as Citadel, Schwab and Fidelity, the platform has a non-custodial business model that is different to a typical <a href="https://cryptology.com/" rel="noopener noreferrer nofollow">cryptocurrency exchange</a>.</p><p>This approach aims to mitigate conflicts of interest by separating the exchange function from the broker dealer function, and therefore should be looked upon favorably by regulators such as the SEC.</p><p>EDX Markets was launched with the goal of becoming the - </p><blockquote> “crypto marketplace of choice for industry leaders” </blockquote><p>And it intends to expand on TradFi’s offerings such as liquidity provision and competitive quotes to get better pricing for retail orders.</p><h2 id="header-3">Why is it good news for crypto?</h2><p>Some corners of the crypto community feel that TradFi megaliths such as BlackRock and Fidelity are the antithesis of Bitcoin and its ethos of a democratic way to store and transfer value. Bitcoin was created to provide everyday people with an alternative and decentralized form of finance that was peer-to-peer and permissionless, avoiding the need for, and control of, centralized organizations.</p><p>However, beyond Bitcoin and its noble foundations, crypto must mature. And with the involvement of established financial institutions such as BlackRock and Fidelity, many argue this will encourage adoption, especially with the older generations who trust big business while remaining skeptical of crypto.</p><p>In addition, if huge asset managers and their wealthy clients can invest in the likes of Bitcoin, it will bring significant and much-needed liquidity into the crypto market. Let’s take a quick look at some of the key players and the total value of their assets under management:</p><ul><li>BlackRock - $10 trillion.</li><li>Fidelity Investments - $4.9 trillion.</li><li>WisdomTree - $83 billion.</li><li>Valkyrie - $80 billion.</li></ul><p>That’s a huge amount of additional capital that could soon have the potential to flow into Bitcoin and altcoins. The SEC’s initial deadline for a response to BlackRock’s ETF application is August 2023, and whether that response is positive or negative, will certainly have an effect on the crypto market and broader community. Let’s wait and see.</p>

Fidelity refiles for Bitcoin spot ETF, as more of TradFi moves into crypto

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