Is The Agency Intimidated By BlackRock?

A critic on Reddit believes that the recent surge in Bitcoin prices, which broke above critical resistance levels registered in July 2023 and reached 2023 highs, may be partially attributed to the United States Securities and Exchange Commission’s (SEC) potential intimidation by BlackRock’s significant influence in Wall Street.

Reddit User Questions The Influence Of BlackRock On Bitcoin ETF Application

The user expressed concern that while the agency has been reviewing several Bitcoin ETFs, none have been approved yet. However, BlackRock’s iShares Blockchain and Tech ETF, which has the ticker symbol IBTC, was briefly listed on the Depository Trust & Clearing Corporation (DTCC) website on October 24 before being quickly delisted.

Even though the SEC has not publicly issued a statement notifying the trading community that BlackRock’s ETF application has been successful, the listing on DTCC, the user notes, means it is “one half-step away from actually having the spot ETF available to traders.”

The issue with this, the user notes, is that BlackRock recently applied for the spot Bitcoin ETF in June 2023. Less than six months later, there are concrete steps that the product will be finally approved by the SEC, though prior applications were rejected. In the critic’s assessment, when BlackRock submitted their application, it was a “done deal,” a cause for suspicion. 

The critic speculated:

Either BlackRock influences over the SEC to change their decision-making process or have insiders fed info from the SEC to inform them how to approve their applications, or both.

To illustrate their role in the ETF market, the Reddit user pointed out that the SEC has approved 575 ETF applications for various products submitted by the Wall Street giant, only disallowing one. 

Will The SEC Approve The First Bitcoin ETF?

How the SEC will handle the pressure from the market and some policymakers to greenlight the first spot Bitcoin ETF is yet to be seen. It should also be noted that even with BlackRock applying for one, the SEC is not obligated to approve their product or any other in the market. 

In mid-October, BlackRock amended the prospectus of their spot Bitcoin ETF application with the SEC. Some changes include the applicant acknowledging the stiff competition for the product’s approval.

BlackRock is one of Wall Street’s prominent financial firms and is currently the world’s largest asset manager, with over $10 trillion worth of assets under management (AUM) as of late June 2023. Besides asset manager, BlackRock is a major player in the ETF scene, managing over $2 trillion in AUM through its iShares ETFs explicitly tailored for retail investors. 

Feature image from Canva, chart from TradingView