How will the SEC rule on BlackRock and other spot bitcoin ETFs?

BlackRock, the world's largest asset manager, is leading the campaign to get regulatory approval for the spot Bitcoin ETF. The company is taking advantage of a significant shift in mindset and the sense that managers' attitudes are more or less aligned with its own.

That's the opinion of BlackRock veteran Martin Bednall, who spoke on a panel at the 2023 CCData Digital Asset Summit in London on Tuesday.

BlackRock Has Come Around Bitcoin, Ex-Exec Believes.

Bednall, a managing director at BlackRock in London from 2000 to 2013, is now CEO of Jacobi Asset Management, which in September launched its first-ever Bitcoin ETF in Europe. It is now listed on Euronext Amsterdam.

He explained the change in sentiment in the property management market on Tuesday's forum. And especially through the old organization.

Over the years, BlackRock's current CEO, Larry Fink, has not been a believer in cryptocurrency, Bednal said. Instead, Fink shared the view that crypto is a shady and money-laundering tool still prevalent in some quarters.

But that's not Fink's view or the market, Bednal argued. Bednal outlined BlackRock's views on the role of Bitcoin and the long-term evolution of its position on the Bitcoin ETF.

Thanks in part to high-profile legal battles in the United States, BlackRock says it has come to view its product more broadly. Bednal and others on the panel mentioned Ripple's victory against the Securities and Exchange Commission (SEC) last July. Along with Greyscale's recent successful SEC petition.

“The mood music has definitely changed, with the grayscale thing and the Ripple thing going away. And I think so [the moderator’s] But the question is, why is it an application now? The time of application, not necessarily the time of approval,” he said.

Top-down changes to Blackrock

For Bednall, the answer is clear. Larry Fink no longer sees Bitcoin as a bad name. Indeed, to hear Bednall tell it, the views of the current Black Rock CEO have done something of a near 360-degree turn.

“BlackRock has changed its tune a lot over the years, from when Bitcoin was an index of money laundering, to now it's a global asset in the form of digital gold. So it took some time to get there,” he said.

In Bednall's view, BlackRock's change in attitude toward bitcoin didn't happen in a vacuum. The asset manager is talking to people in the supervisory position, where there has been a shift in thinking.

I would say that Black Rock is very close to controllers around the world. They have a large team in their regulatory arm, and they communicate with regulators often. So they must be getting votes, there. So that's an indication that the mood music has changed again, and the SEC is getting close to approving one of these. Because otherwise, Blackrock wouldn't have bothered,” said Bednall.

Learn more about BlackRock's aggressive campaign to expand and add new products in the ETF market.

Potential outcomes of ETF applications

In late September, the SEC extended the review period for Bitcoin ETF applications from BlackRock, Bitwise and Valkyrie. The regulator also mentioned the need to continually assess the potential for misuse of the product.

Still, Bednal is bullish on BlackRock's potential to lead the Bitcoin ETF market for the space. BlackRock predicted it would command “the bulk of AUM” in this market.

Bednall said he has worked in the ETF space for 15 years and has “never seen such expectations” when it comes to product approvals.

When multiple players move at the same time, Bednall said, he finds that U.S. regulators can more or less resolve the issue with a single decision or decisions.

“I think the SEC will probably approve all the applications at once. I don't think they want to give any first mover an opportunity,” he said.