BlackRock asset management warned the U.S. Securities and Exchange Commission (SEC) about classifying Bitcoin (BTC) as a security. Bitcoin has multiple times been considered a commodity, but changing its asset classification could cause problems, as per BlackRock. This comes at a moment in which Bitcoin seems to be starting a new bull run that pushed the digital currency to new highs this year.
Bitcoin Security Classification Sparks BlackRock Concerns
In their updated ETF filing, BlackRock is raising concerns about a possible SEC decision to re-classify Bitcoin as a security and not as a commodity. Several companies, including BlackRock, have presented proposals to offer Bitcoin spot trading to investors in the United States, nevertheless, there has been no official answer on that matter as of yet. Indeed, the answer could come as soon as in Q1 2024.
One of the reasons behind BlackRock’s concern about a possible classification of Bitcoin as a security could be linked to how this digital currency is traded and handled in the United States. At the same time, this could have an impact on other countries as regulatory entities could copy what the SEC does.
It is worth taking into consideration that Ripple has been sued by the SEC in the past claiming that the company issued unregistered securities, referencing the XRP virtual currency. The SEC has also dropped claims against Ripple Labs executives. In late 2020, when a new bull market started for virtual currencies, XRP was heavily affected by this decision, pushing the price of XRP below $0.20 for a short period of time.
This could also affect Bitcoin. Indeed, both Bitcoin and Ethereum (ETH), the two largest cryptocurrencies in the market, have been considered commodities and not securities. Changing their classification could cause panic in the market and affect multiple projects linked to Bitcoin for institutional investors in the United States and the world. Therefore, BlackRock is closely monitoring what the SEC is doing and how this could impact the whole crypto industry.