Bitcoin Price Spikes Amid Speculation About ETF Regulatory Approval

The price of the largest cryptocurrency by market cap has seen a spike amid speculation a Bitcoin ETF could soon be approved to appear on the stock exchange.

A Bitcion mock-up on Jan. 12, 2022. John Fredricks/The Epoch Times

Bitcoin’s price has surpassed $35,000 for the first time since May 2022, amid speculation that investment company BlackRock’s proposed iShares spot Bitcoin exchange-traded fund (ETF) could be close to receiving regulatory approval.

A Bitcoin ETF is an exchange traded fund that invests primarily in assets related to the digital currency’s price and sells shares to investors on a traditional exchange. An ETF would mean people could invest in cryptocurrency without owning any.

BlackRock filed for a Bitcoin ETF in June. But around Oct. 23, keen eyed traders noticed the ETF had appeared on an eligibility list controlled by the Depository Trust and Clearing Corporation (DTCC).

In the wake of the news, Bitcoin’s price spiked on Oct. 23, gaining more than 10 percent in value from $31,000 to over $34,000. According to the crypto market analysis website Coingecko, it soon surpassed $35,000. At the time of writing, the digital assets price has settled to around $34,700.

In an Oct. 23 fund flows report from asset management firm CoinShares’s head of research, James Butterfill noted that cryptocurrency had seen its fourth week of inflows, likely connected to the speculation around BlackRock’s ETF.

A man conducted a transaction at a cryptocurrency shop in Hong Kong, on Nov. 21, 2022. Sung Pi-Lung/The Epoch Times

“While the most recent inflows are likely linked to excitement over a spot Bitcoin ETF launch in the United States, they are relatively low in comparison to the initial inflows following BlackRock’s announcement in June,” Mr. Butterfill said.

Bloomberg ETF analyst Eric Balchunas said in an Oct. 23 post on X, the platform formerly known as Twitter, that the DTCC listing was “all part of the process” of bringing a crypto ETF to market. Mr. Balchunas further speculated that BlackRock might have already got the “green light” to proceed with the ETF, or was in the process of “prepping everything assuming so.”

Analyst and finance lawyer Scott Johnson also speculated on X about what the DTCC listing could mean. “They’ve obtained a CUSIP in prep for a launch,” or Blackrock might be “looking to seed with cash this month,” he said, adding that it might be nothing.

Bitcoin ETF Not Approval Just Yet

DTCC addressed the ongoing speculation, telling Reuters on Oct. 25, that the ETF appearing on the eligibility list is not “indicative of an outcome for any outstanding regulatory or other approval processes.” It also revealed the Bitcoin ETF had been added to the list in August as a “standard practice.”

According to observers, the listing on the DTCC briefly went down on Oct. 23, but then returned with an “N” under the create/redeem column; previously, there had been a “Y.” Another Bloomberg ETF analyst, James Seyffart, said he doesn’t think the action “means all that much.”

“I think it indicates Blackrock is getting everything ready to launch if and when they get an SEC approval. And that the N just means it’s not open for create redeem because it’s not live yet,” Mr. Seyffart said on X.

Attendees pose for photos in front of The Miami Bull during the Bitcoin 2022 Conference at Miami Beach Convention Center on April 7, 2022. Marco Bello/Getty Images

The Securities and Exchange Commission (SEC) has not approved any instances of crypto being directly tradable on the traditional stock market yet.

Along with Blackrock, ARK Investment, and Fidelity, crypto investment firm Grayscale is one of several companies seeking the SEC’s approval to launch a spot Bitcoin ETF.

Grayscale submitted a new application with the SEC for a spot Bitcoin ETF on Oct. 19, intending to list the shares of a Grayscale Bitcoin Trust on the New York Stock Exchange after winning an earlier court case to have the SEC’s initial denial reviewed.