BlackRock ETF might open door to institutional shorting of bitcoin
BlackRock has filed for regulatory approval of a bitcoin ETF. The SEC has never approved one, but investment giant has a nearly flawless track record when applying for ETFs: over 500 approvals per one denial. Unlike the over-the-counter traded Grayscale Bitcoin Trust (GBTC), which Barry Silbert’s Grayscale would like to convert into an ETF, BlackRock could open the door for institutional short-selling of bitcoin via a NASDAQ-listed bitcoin ETF. BlackRock’s proposed bitcoin ETF will almost certainly be DTC eligible, whereas most over-the-counter securities are not. The Depository Trust Company, or DTC, serves as a securities repository with over $32 trillion worth of securities deposited within its system. It’s by far the largest source of US broker ‘borrows,’ also known as ‘locates.’ Put simply, BlackRock’s bitcoin ETF will allow short-sellers to easily locate shares to borrow from the world’s most voluminous trust company. DTC processes quadrillio...