• The SEC has previously rejected an ETF application from BlackRock in 2014.
• Multiple large whales withdrew Bitcoin yesterday.
• Surge in Bitcoin open interest signals possible increase in volatility.
BlackRock’s ETF Rejected by SEC
The Securities and Exchange Commission (SEC) once rejected an Exchange-Traded Fund (ETF) proposed by the world’s largest asset manager, BlackRock, back in 2014. The proposed ETF was characterized by its nontransparent nature, which would have hidden its holdings from investors, akin to a blind trust. Moreover, Shepherd Smith Edwards and Kanta (SSEK) noted that this ETF did not provide assurance that its trading would be aligned with the net asset value and only provide reports quarterly instead of daily as per the SEC’s stipulation.
Multiple Large Whales Withdrawal
Yesterday multiple large whales withdrew their Bitcoin holdings from exchanges, suggesting that they may be preparing for a larger market move or profit taking on their positions. This follows news of a surge in open interest in Bitcoin futures contracts, signaling a potential increase in volatility over the coming weeks and months.
Core Inflation Remains High
Meanwhile, core inflation remains high for Europe as headline inflation sees disinflationary trends across the continent due to weak demand and supply disruptions caused by the pandemic. This could lead to further policy easing measures being taken by central banks to stimulate economic activity across the region.
Bitcoin Withdrawals Surpass Deposits
For the second time since April 2020, withdrawals of Bitcoin have surpassed deposits according to data from Glassnode indicating that more users are cashing out than buying into BTC despite recent bullish movements seen in price action over the past month or so. This could suggest that investors may be looking to take profits on their positions at current prices before any possible further gains are seen or it could also mean that traders are hedging against future losses should prices experience another correction lower again soon after recently hitting an all-time high again earlier this week.
BlackRock’s New ETF Application
BlackRock has filed its application for a new spot Bitcoin ETF which if approved would be the first of its kind to receive regulatory approval from the SEC. Despite having previously been rejected once before it appears that BlackRock is more confident this time around given wider acceptance of digital currencies amongst mainstream finance firms as well as other encouraging signs such as institutional adoption taking place throughout 2021 thus far including Tesla’s $1 billion purchase of BTC earlier this year as well as publicly traded companies like Square announcing similar purchases recently too.