BlackRock's new move "detonates" Bitcoin, bull market sentiment is brewing

The crypto community’s long-awaited October “Uptober” bull run seems to have finally arrived.

Bitcoin prices rose for the second consecutive week, breaking through the $34,000 mark after the U.S. stock market closed on Monday, the first time since May last year. The increase in the past 24 hours reached 14%, and as of press time, it stabilized at around $33,300.

The total global cryptocurrency market capitalization has increased to $1.23 trillion, up 7.66% in the past 24 hours.

Good news related to ETFs boosts sentiment

Today’s news spotlight is dominated by two prominent players in the Bitcoin spot ETF market: Blackrock and Grayscale .

The United States Court of Appeals for the District of Columbia Circuit officially announced that Grayscale Investments won the case against the U.S. Securities and Exchange Commission ( SEC ) in court, which means that the SEC must re-examine Grayscale's ETF conversion application.

Nate Geraci, president of The ETF Store, said in his tweet that the formal ruling would be another step towards the approval of the spot Bitcoin ETF. "No matter what you think of Grayscale, their legal efforts have paved the way for every issuer."

Grayscale also said it looks forward to continuing to work constructively with the SEC on converting GBTC into an ETF, adding that it “intends to take action as soon as possible.”

In addition to Grayscale’s progress, the most exciting news is that BlackRock, the world’s largest asset management company, seems to be ready for its proposed spot Bitcoin ETF.

Today, BlackRock’s iShares Bitcoin Trust has been listed on the Depository Trust & Clearing Corporation (DTCC) website. According to the listing information, the planned fund’s ticker symbol is IBTC. Prior to this, BlackRock revised its Bitcoin ETF proposal on October 18.

IBTC is the first proposed spot bitcoin ETF to be listed on the DTCC, Bloomberg Intelligence senior analyst Eric Balchunas said Monday.

DTCC is a US financial market infrastructure giant that processes trillions of dollars in securities transactions every day. According to the company's website, DTCC's subsidiary National Securities Clearing Corporation (NSCC) has an ETF clearing process that includes "the ability to review ETF portfolio components, which is also used to automatically create and redeem ETF units and their subsequent settlement."

In addition, after studying the S-1 amendment submitted by BlackRock, American financial lawyer Scott Johnsson found that BlackRock had obtained the CUSIP number prepared for the release of the Bitcoin spot ETF. CUSIP stands for Committee on Uniform Securities Identification Procedures, and this number is also used as the uniform identification code for US securities.

The document also shows that BlackRock is preparing Seed Capital for the Bitcoin spot ETF. Seed ETF refers to providing initial funds in exchange for ETF shares that can be traded on the open market.

“It’s worth noting that BlackRock was so quick in these preparations (preparing funds, equities, DTCC) that it’s hard not to think that this was because they received a signal that approval was certain/imminent,” Balchunas wrote in the X post.

Analysts observe multiple bullish signals

Analysts said the new gains were driven by multiple bullish signals. In an interview with Bloomberg, Pavel Kuznetsov, portfolio director at Ryze Labs, highlighted that GBTC’s negative premium continues to narrow, with the current discount to net asset value being -11%.

Pavel Kuznetsov said, "This is a bullish signal as the NAV discount reflects the growing consensus that a spot Bitcoin ETF will be approved in the first quarter of 2024. The approval of a spot Bitcoin ETF is a bullish catalyst that will pave the way for capital inflows."

“The strong momentum for BTC over the past month has been driven by growing investor confidence that a BTC spot ETF will soon be approved,” Matteo Greco, a research analyst at Fineqia, an investor focused on crypto and fintech, said in a report.

Michael Dunn, president of Bitnomial exchange, talked about how Bitcoin is correlated with other cryptocurrency markets and has some characteristics of a market hedge.

He analyzed that due to Bitcoin's status as digital gold and the market's expectations for the approval of spot ETFs, Bitcoin's explosive momentum is much higher than other altcoins. Bitcoin's dominance indicator has been increasing since the end of 2022, highlighting its outperformance over other cryptocurrencies.

The crypto market rebound comes as major U.S. stock indexes are at 10-month lows and the 10-year Treasury yield is above 5%. However, Pavel Kuznetsov is cautious about the end of Bitcoin's correlation trend with the S&P 500 and Nasdaq.

Pavel Kuznetsov said in his report that "in the shorter term, Bitcoin, as an emerging asset class, is subject to regulatory tailwinds and headwinds, decisions by large holders, and macro factors. It is easy to interpret short-term price movements and speculate that it is decoupling from its S&P trend, but we want to see this over a longer time dimension."