Binance's $4.3B Settlement Clears Path for Spot Bitcoin ETFs Approval: Analysts
Summary:
Binance's $4.3 billion settlement with the US clears the path for the country's securities regulator to approve spot Bitcoin exchange-traded funds (ETFs), as per industry observers. This agreement allows the Justice Department and Treasury to monitor Binance’s compliance with various regulations for up to five years. As some suggest, this move reduces Binance's market dominance, a key issue raised by the Securities and Exchange Commission in denying previous spot Bitcoin ETF applications. This development has sparked speculations regarding the collaboration between BlackRock and US government to secure dominance in the spot Bitcoin ETF market. Additionally, other investment firms like Grayscale, Fidelity, WisdomTree, Invesco Galaxy, Valkyrie, VanEck, and Bitwise await the SEC’s approval for their respective Bitcoin funds.
Binance's resolution of $4.3 billion with the US marked the ultimate barrier before the nation's regulatory agency for securities acknowledges spot Bitcoin exchange-traded funds (ETFs), mention several industry observers. The settlement meant Binance consented to adhere to Justice Department and Treasury compliance monitors for as long as five years. Consequently, these government bodies have substantial authority to ensure the exchange follows Anti-Money Laundering and sanctions regulations and more. The Securities and Exchange Commission has previously denied spot Bitcoin ETFs on grounds of market manipulation. As per a tweet by Travis Kling, chief investment officer of Ikigai Asset Management in June, Binance needed to lose some of its market dominance before BlackRock's spot BTC ETF application was greenlighted. He affirmed that Binance must either vanish or have a significantly smaller role in price discovery for this ETF to get approval.
Kling's speculation led others to question how much cooperation there is between BlackRock and the US government to achieve a preferable standing in the spot Bitcoin ETF market. Colin Talks Crypto, a YouTuber, found it questionable that Binance's settlement coincided with the release of a Bitcoin ETF. He pondered if this was a strategy for BlackRock to acquire a considerable volume of BTC at a lower price and to eliminate competition from US markets just as ETFs are launched.
It was also observed that BlackRock and Vanguard, its competitor, jointly own 11.5% of Coinbase, Binance's leading competitor, leading some to speculate that this action against Binance may have been deliberate. BlackRock, during a meeting with the SEC on November 20, outlined its plan to use an in-kind or in-cash redemption model for its Bitcoin Trust.
Grayscale also had discussions with the regulatory body regarding its prospects to list a spot Bitcoin ETF. Fidelity, Invesco Galaxy, WisdomTree, VanEck, Valkyrie, and Bitwise are also awaiting the SEC's approval for their Bitcoin funds.
According to Mike Novogratz, CEO of Galaxy Digital, a digital asset investment firm, the Binance resolution is "super bullish" for the cryptocurrency sector. Michael Bacina, a partner at Piper Alderman, opined in a note to Cointelegraph that it's better to let the speculation unfold.
Published At
11/23/2023 3:51:48 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.