BlackRock Nears SEC Approval for Bitcoin ETF, BlockFi Resurfaces Amidst Crypto Turbulence

BlackRock, a prominent investment firm, has taken a significant step towards introducing a Bitcoin ETF (Exchange-Traded Fund) by securing a listing on the Depository Trust & Clearing Corporation (DTCC). Such a move typically suggests an imminent nod from the United States Securities and Exchange Commission (SEC).

On October 23, Eric Balchunas, an analyst specializing in ETFs at Bloomberg, shared his insights on the matter. He indicated that BlackRock's ETF is the first in DTCC's crypto-focused listings. Balchunas further discussed that BlackRock might have received the green light from the SEC, or the firm is preparing based on an assumption of approval. According to BlackRock's application timeline, the SEC's final decision will be made by January 10, 2024.

In a parallel development in the cryptocurrency sector, BlockFi, a crypto lending organization, has successfully emerged from its financial difficulties, as confirmed in an update on October 24. This positive news follows FTX's announcement of recovering nearly $7 billion of its assets.

FTX had faced challenges, including an alleged misappropriation of a significant $8.7 billion from their clients. Notably, BlockFi had extended over $650 million to FTX, becoming one of the largest creditors to the exchange. Consequently, the prospects of repayment for BlockFi's clients are closely tied to FTX's asset recovery capabilities.

Furthermore, FTX's leadership is carefully considering its next steps. Potential directions include selling the exchange, which boasts a substantial user base of over nine million, or seeking collaborations to revitalize the platform. An independent resurgence is also a possibility.

In contrast, recent legal documents reveal that BlockFi may not continue its operations. However, creditors from the turbulent crypto downturn in 2022 see a glimmer of hope. Companies like FTX and BlockFi are initiating the process to refund their customers' investments.

The revival of BlockFi following its financial distress signifies its ability to pursue repayment from other firms, including the likes of Three Arrows Capital and FTX. The final refund amount to its creditors will be influenced by BlockFi's legal proceedings regarding FTX and other factors.