What Happens With Crypto If The Spot Bitcoin ETF Is Approved? Here is the Golden Example!
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When the Gold ETF first started trading on the stock exchange, its market value was only $1 trillion. Today, the market value of Gold is over $11 trillion. A similar outcome could be expected for the Spot Bitcoin ETF, which represents digital gold, BTC.
BlackRock Spot Bitcoin ETF
BlackRock has filed an application for a Bitcoin spot exchange-traded fund (ETF). As the world's largest investment management company, if approved, it will be the first crypto spot ETF in the United States. According to the application filed by Nasdaq with the U.S. Securities and Exchange Commission (SEC), Coinbase Custody Trust Company will be the custodian for the fund's Bitcoin assets, while Bank of New York Mellon will hold the fiat assets. BlackRock's iShares Bitcoin Trust will trade as Commodity-Based Trust Shares.
The document states that previously approved spot-traded products in commodity and currency markets are "typically unregulated and (...) the Commission primarily relied on the underlying futures market when approving trust shares."
"Therefore, the significant size of the regulated market test does not require the regulation of the spot Bitcoin market for the Commission to approve this proposal."
Despite numerous applications, the SEC has not yet approved a spot Bitcoin ETF. Grayscale filed a lawsuit against the SEC after its application for a spot Bitcoin ETF was rejected. Canada's Purpose Bitcoin ETF, established in early 2021, became the world's first spot-traded Bitcoin ETF.
What Happens If a Spot Bitcoin ETF is Approved?
If a spot ETF is approved for trading on U.S. exchanges, it would likely result in a significant increase in BTC price, similar to what we observed with gold. In 2004, the NYSE listed the first gold ETF. Since then, the price of gold has never returned to its November 2004 level. With a market value of $1 trillion back then, gold has now reached $11 trillion. While multiple economic factors influenced the price of gold, the listing of the ETF played a significant role in attracting global institutional funds.
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