In a surprising turn of events, BlackRock’s proposed iShares Bitcoin Trust was removed from the Depository Trust & Clearing Corporation (DTCC) list, a move that momentarily sent shockwaves through the cryptocurrency community and markets.
The trust, tagged under the ticker IBTC, had initially sparked excitement among investors and market pundits, who saw it as a positive stride toward the approval of a Bitcoin Exchange Traded Fund (ETF) in the United States.
- Initial Excitement and Subsequent Disappointment: The listing of BlackRock’s IBTC on the DTCC’s database was met with enthusiasm as it was interpreted by many as a sign that U.S. federal regulators were possibly warming up to the idea of a spot Bitcoin ETF. This excitement, however, was short-lived when the ticker was suddenly removed from the DTCC’s database, leading to a swift drop in Bitcoin’s price by over 3% from near $35,000 to around $33,432 within 30 minutes following the news12.
- Market Reaction: The cryptocurrency market reacted swiftly to the removal of the IBTC ticker from the DTCC list. Bitcoin’s price fell sharply, underscoring the sensitivity of the crypto market to regulatory developments. The price drop was notably in sync with the disappearance of the IBTC ticker, which was seen by many as a setback for BlackRock’s proposed iShares Bitcoin Trust. The impact was also felt in the futures market, where data from the Chicago Mercantile Exchange (CME) revealed that open interest for Bitcoin futures surged to a record high of $3.4 billion on the day the IBTC was initially listed on the DTCC website, but subsequently fell after its removal13.
- Speculations Around The Removal: The sudden disappearance of the IBTC ticker led to speculations regarding the readiness of regulators towards approving a Bitcoin ETF. Some analysts, including Bloomberg’s Eric Balchunas, saw the initial listing as a sign that approval was imminent or certain. However, the subsequent removal has cast doubts on this perception, with some guessing that the U.S. Securities and Exchange Commission (SEC) might have communicated with BlackRock, urging them to delay the listing until a more opportune time45.
- Silence from BlackRock and SEC: Post removal, both BlackRock and the SEC have remained tight-lipped about the incident. BlackRock mentioned being within a “filing restriction period,” while the SEC declined to comment. This silence leaves room for further speculation and indicates that while the journey towards a Bitcoin ETF in the US has begun, there are still hurdles to overcome5.
- Conclusion: The abrupt removal of BlackRock’s iShares Bitcoin Trust from the DTCC listing underscores the tentative nature of regulatory advancements in the cryptocurrency space, particularly regarding the approval of a Bitcoin ETF in the US. The incident serves as a reminder of the regulatory uncertainties that continue to surround the cryptocurrency market, and the profound impact such developments can have on market dynamics.
The unfolding scenario surrounding BlackRock’s iShares Bitcoin Trust and its listing on the DTCC is a stark reminder of the intricate interplay between regulatory developments and market reactions in the burgeoning cryptocurrency space.