The price of bitcoin rose on Monday following the release of some positive news about BlackRock’s ETF.
Madness in the markets after news of BlackRock’s bitcoin ETF
The news led to speculation that the SEC’s approval of BlackRock’s application might be imminent, not least because only a few days earlier it had been reported that the company had submitted an updated application based on comments received from the SEC itself.
As the news spread, the price of Bitcoin shot up to over $35,000, up from under $30,000 the day before.
But the next day, the ETF (iShares Bitcoin ETF, IBTC) was removed from the DTCC platform.
This removal caused many users to crash the official DTCC website via DDoS.
After a while, the site came back online and the next day, the iShares Bitcoin ETF reappeared.
This also had some impact on the price of Bitcoin, but it was later discovered that it was completely false that the listing on the DTCC meant an imminent listing on the Nasdaq.
The overly optimistic news
So, on the one hand, Monday’s excitement over the possible imminent approval of BlackRock’s Bitcoin Spot ETF created a kind of FOMO, while on the other hand it was later revealed that such approval was not imminent at all.
In fact, a DTCC spokesperson explained that IBTC had been listed on their platform since August.
No one had noticed it because it is listed on a page where there are hundreds of other ETFs. The fact that DTCC is a Nasdaq platform, on which the ETF will be listed, did the rest.
Therefore, the news of a possible imminent SEC approval is overly optimistic, although it does not seem very far off.
The assumption remains that the SEC will take its time in making all its assessments and may not actually proceed with approval until early January or late December.
What now seems very likely is that approval will come.
The role of China
At this point, one might wonder why the price of BTC has not returned to $30,000.
Indeed, there are several indications that the news of the SEC’s possible approval of spot bitcoin ETFs could be priced by the crypto markets between $30,000 and $31,000, but the current price is still above $34,000. Yesterday, it even tried again to break above $35,000 without success.
The fact is that this is not the only ongoing dynamic affecting the bitcoin market.
Another dynamic that is definitely powerful and has been going on for weeks now is the injection of liquidity into the Chinese markets by their central bank.
On Monday, while the price of bitcoin was rising on the wave of IBTC news, the Chinese yuan was appreciating against the US dollar after two almost consecutive weeks of depreciation.
By Tuesday evening, it had already started to fall again, so much so that yesterday it was back to lower levels than on Sunday.
In other words, since Tuesday there has been a different dynamic at work that has kept the price of bitcoin at $34,000 despite the fact that the hypothesis of an imminent approval of ETFs has been deflated.
Bitcoin news: What does the listing of BlackRock’s ETF on the DTCC mean?
According to some industry experts, the DTCC listing would mean absolutely nothing.
My brothers in bitcoin:
I spent six years managing new ETF launches for NYSE (2010-2016), and about 15 years in ETF product development and management.
The DTCC thing means absolutely nothing. Nothing. Get offline and spend time with your loved ones.
— Phil Bak
(@philbak1) October 24, 2023
It is merely a preliminary listing to obtain a ticker symbol and a unique identification code known as a CUSIP. It is part of the normal process an ETF goes through while awaiting SEC approval.
So the news that sparked Monday’s little boom turned out to be completely unimportant, and yet the price did not come back.
For example, if you search for IBTC’s CUSIP code, 46438F101, there is still no trace of it on the various ETF exchange platforms. The same result is obtained by searching for the corresponding ISIN code US46438F1012.
In other words, the timeline for the approval of the BlackRock ETF has not changed, nor have the timelines for other similar applications.
It should be noted, however, that IBTC is currently the only bitcoin spot ETF on the DTCC, but perhaps only because BlackRock was the only one to apply, making approval highly likely.