Get ready for some seismic moves in the crypto space when a Bitcoin ETF is finally approved by the SEC.
Recently BlackRock, which manages around $9.4 Trillion U.S. dollars in total assets under management, is the front-runner to gain approval by the SEC with over a dozen of other companies lined up awaiting approval.
The SEC has already rejected most of those applicants multiple times already, but is the 3rd time the charm for BlackRock?
Some are speculating it may be, as they’ve been meeting with the SEC and Nasdaq communication directors, leading some to believe an approval is forthcoming and they are coordinating their press releases (that’s my opinion, but I’m probably not wrong about this).
It sounds like the final sticking point before obtaining approval from the SEC was what sounds like a small change, but is actually a big deal IMO.
BlackRock revised their spot bitcoin ETF proposal to include cash redemptions, as opposed to in-kind redemptions; which begs the question “What are in-kind redemptions?”.
According to Investopedia “In-kind redemptions are non-monetary payments made for securities or other instruments. Rarely used in the mutual fund industry, in-kind redemptions are common with exchange traded funds (ETFs).”
This change to BlackRock’s application seems aimed at meeting the SEC’s preferences for in-cash redemptions.
If I were to weigh in on this topic, which you just know I gotta, I would be fine with making this change if it means they can gain approval and actually launch their spot Bitcoin ETF. They can always lobby for making changes in the future to add the ability to also include in-kind redemptions, but right now just focus on getting approval to launch.
There are a lot of Bitcoin price predictions out there ranging from $100,000-$500,000 per Bitcoin, and even a few estimates that Bitcoin could reach $1 million in the “days to weeks” following the approval of a spot BTC exchange-traded fund (ETF).
Why you might ask? Well, it all comes down to Economics 101, which teaches supply-and-demand. You see there is a limited number of Bitcoin in the world, and the amount created goes through what is called a halfening every few years, which cuts in half the number of new Bitcoins that are generated from mining. Add into that equation the fact that a lot of the early Bitcoin, or BTC, that were mined at the beginning of the new crypto currency are in dormant crypto wallets that in some cases their owners have lost or forgotten the crypto key phrases and passwords to open the wallets, essentially locking them out for good.
Let me share some numbers with you:
There are a total of 19,575,306.25 Bitcoin in existence that have been mined since the 1st Bitcoin was first created on January 12, 2009. There are now only 1,424,693.8 Bitcoins left to be mined, with an average of 900 new Bitcoin mined each day.
Estimates suggest that around 6 million Bitcoins, or 30% of Bitcoin’s total supply, have been lost, amounting to an insane $554 billion in value.
After all 21 million Bitcoins are mined by 2140, miners will no longer receive block rewards and will rely on transaction fees for compensation.
In an interview with CNBC Grayscale’s CEO Michael Sonnenshein said a Bitcoin ETF approval could bring $30 trillion into the crypto market.
And MicroStrategy’s co-founder Michael Saylor said that a Bitcoin ETF approval would be the most significant development in Wall Street in 30 years.
So you can see that due to supply-and-demand if a Bitcoin ETF is approved, there won’t be enough Bitcoin to meet the demand, causing the price of each BTC to skyrocks.
As a hodler of Bitcoin here’s to hoping!
BlackRock, Nasdaq, SEC Met Regarding Bitcoin ETF