Cryptocurrencies have been in the spotlight in recent times, and recent predictions about the approval of BlackRock’s (NYSE:BLK) Bitcoin (BTC-USD) exchange-traded fund (ETF) have generated a lot of buzz in the financial world. It’s as if we are in the midst of an exciting story unfolding in the cryptocurrency market.
Imagine for a moment Eric Balchunas, a senior ETF analyst at Bloomberg, who, with his knowledge and experience in the field, has predicted that there is a 50% chance that the Securities and Exchange Commission (SEC) will approve BlackRock’s Bitcoin ETF. But what makes this forecast so interesting?
Well, it turns out that Elliott Stein, senior litigation analyst at Bloomberg Intelligence, has estimated that there is a 70% chance that Grayscale, the company that has appealed the SEC’s decision to reject its ETF application, will win its case. This situation creates a suspenseful and exciting scenario where BlackRock and Grayscale face off in a legal battle that could change the cryptocurrency landscape.
Historically, the SEC has been cautious about approving Bitcoin ETFs and has rejected several applications in the past. However, Balchunas raises an interesting theory: by approving BlackRock’s ETF, the SEC could demonstrate that it is open to financial innovation and willing to adapt to market demands. It could be a way to “save face” and show the world that they are willing to embrace change.
This legal story between Grayscale and the SEC has captured the attention of many investors and cryptocurrency enthusiasts. The case has gone through legal filings and oral testimony, and now we are awaiting the decision of the U.S. Federal Appeals Court. Everyone is expectant, waiting to know the outcome of this story that could mark a milestone in the world of cryptocurrencies.
But what does all this mean for other cryptocurrencies, and how might they benefit if BlackRock’s Bitcoin ETF is approved? Now let’s talk about three of them.
Ethereum (ETH-USD)
First, Ethereum (ETH-USD) is the second largest cryptocurrency by market capitalization and often shows a positive correlation with Bitcoin. Ethereum is known to be a platform for smart contracts and decentralized applications, which makes it sensitive to general trends in the cryptocurrency market. If BlackRock’s Bitcoin ETF is approved, it is very likely that Ethereum will also experience an increase in its demand and price. Besides, Ethereum is one of the few platforms that are beginning to be adopted by governments, such as the ECB (European Central Bank), issuing bonds via the Ethereum blockchain.
There is also a special use for this type of ledger in an industry that is seemingly growing by the day: the peer-to-peer betting industry. People can now bet on certain events by a specified date, sort of like an equity options contract, only better. Surely those on the inside of these complex networks will find a way to market these potential uses and ride the BlackRock Bitcoin ETF push.
XRP (XRP-USD)
Another cryptocurrency that has shown a correlation with Bitcoin is XRP (XRP-USD). Ripple has focused on the traditional financial sector and has established partnerships with various financial institutions. This influence in the traditional sector may cause Ripple to also benefit from the approval of BlackRock’s Bitcoin ETF, as it could be seen as a vote of confidence in cryptocurrencies by the SEC. It would be like Ripple receiving some sort of official recognition and endorsement.
Further, as the nature of Ripple is near and dear to banking infrastructure, the potential future of accounting practices and ledger records may fall in the hands of the Ripple blockchain. If it is convenient for the banks, it will definitely gain a second look from the SEC in the commission’s consideration of the coin’s acceptance within the financial system. Without a doubt, one of the low-flying coins with high potential can be a synonymous description next to Ripple.
Litecoin (LTC-USD)
Finally, Litecoin (LTC-USD) has been known as the digital “silver” to Bitcoin’s “gold.” Since Litecoin was created as a complement to Bitcoin, it often shows a positive correlation with its larger counterpart. Although Litecoin’s market cap is considerably smaller than Bitcoin’s, it is also likely to benefit from BlackRock’s ETF approval, as it will follow the general trends of the cryptocurrency market. It would be as if Litecoin receives an additional boost from the confidence placed in Bitcoin.
In summary, the story of BlackRock’s Bitcoin ETF and the legal battle between Grayscale and the SEC have generated a lot of buzz in the cryptocurrency world. If the ETF is approved, this could benefit cryptocurrencies such as Ethereum, Ripple, and Litecoin, which have shown correlation to Bitcoin in the past. We are witnessing a story full of twists and turns and excitement in the world of cryptocurrencies, where the protagonists are these innovative digital currencies.
As of this writing, Gabriel Osorio-Mazzilli did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
