BlackRock Plans $10 Million Bitcoin Purchase as SEC Faces Approval Pressure

In a significant move, BlackRock, the world's largest asset manager, is gearing up for a substantial Bitcoin purchase on January 5. This development aligns with Bloomberg analyst James Seyffart's suggestion that the Securities and Exchange Commission (SEC) is under pressure to finally approve pending Spot Bitcoin ETFs.

BlackRock's $10 Million Bitcoin Acquisition

To boost its Spot Bitcoin ETF, BlackRock is set to acquire $10 million worth of BTC on January 5, a slight delay from the initial plan for January 3. This adjustment is likely aimed at ensuring full regulatory compliance and obtaining necessary approvals.

Seeding the ETF: Origin of $10 Million

BlackRock clarified in its S-1 filing amendment that the $10 million stems from the sale of "Seed Creation Baskets." Originally injected with seed capital in October, the ETF's Seed Capital Investor initially purchased $100,000 in shares.

Cautionary Note from Analyst Seyffart

Contrary to assumptions, Bloomberg analyst James Seyffart warns that BlackRock's sizable funding for the ETF doesn't imply an immediate launch. Instead, he speculates that it might be a strategic move in anticipation of an impending launch.

Competition Heats Up

Bitwise, a fellow issuer, signals potential competition by revealing plans to seed its Spot Bitcoin ETF with up to $200 million if SEC approval materializes.

SEC's Dilemma

Seyffart believes the SEC is in a tight spot, citing the lack of valid reasons to deny the Spot Bitcoin ETFs. Referencing the Grayscale case, where the SEC's rejection reasons were deemed insufficient, he suggests that approval for these funds is increasingly likely.

Anticipated Approvals Timeline

Seyffart projects official approval orders from January 8 to 10, despite speculations that the SEC might act sooner. This timeline contradicts rumors of approvals before the week concludes.

While regulatory approval seems imminent, the SEC's predicament and the potential for increased competition pose uncertainties for the future of Spot Bitcoin ETFs. Investors and enthusiasts should observe developments closely and remain cautious in their expectations.