Yahoo Finance Binance Saga Bodes Well for Spot Bitcoin ETF: 3 Stocks to Watch
The biggest news driving the crypto market this week has been Binance CEO Changpeng Zhao stepping down and pleading guilty to U.S. money laundering charges. The move is being seen as cutting a deal with the regulators so that the largest global crypto exchange can continue to trade in the country, even as investors pulled $956 million from the exchange over the news. Binance will also pay $4.3 billion to U.S. authorities as a settlement for this illicit finance probe.
While on the surface, this looks like a big blow to the credibility of the crypto industry, it has opened up opportunities for various traditional finance giants who have applied for a Bitcoin (BTC) ETF with the Securities and Exchange Commission (“SEC”). The biggest concern that the SEC has had with crypto, and one of the main reasons it has been constantly trying to stall these applications, is the lack of monitoring ability of crypto companies by regulatory bodies.
Till now, the industry has been operating too independently for the SEC to allow it to go mainstream. But now, with Binance allowing close scrutiny of the charges made against it, the general feeling is that regulatory authorities are in a better position to monitor the sector going forward and form a regulatory framework. The probability that the SEC may actually start approving these ETFs is supported by the fact that its deadline for rebuttal comments was set till Nov 8.
Bitcoin has rallied and has gone past the $37,000 mark, pushing the $38,000 level following the optimism over this possibility. It is currently trading at $37,295.63 after gaining 2.27% in the past 24 hours.
Investor optimism is currently on a very high level as it is increasingly becoming clear that the regulatory body will stop stalling these applications and stop crypto from going mainstream. The Binance news has only added to this optimism, and while there has been a flight from Binance, Bitcoin is seeing more inflow.
One must, thus, track some of the major Bitcoin ETF applicants at this current juncture to understand the impact this news might have on them. These are some of the biggest names in the traditional marketplace that have decided to explore the crypto space in recent months.
BlackRock, Inc. BLK: This enterprise risk management and fixed-income institutional asset manager applied to launch a Bitcoin exchange-traded fund in June. BlackRock is the world’s largest asset manager. BlackRock’s expected earnings growth rate for the current year is 3.1%. BLK currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Invesco Ltd. IVZ: This investment management company had first filed for a Bitcoin ETF in 2021 but dropped it in October of the same year. However, in June of 2023, it joined the race to be the first investment industry giant to launch a Bitcoin ETF. Invesco’s expected earnings growth rate for the current year is -15.5%. However, it is projected to grow at a rate of 12.6% in 2024. IVZ currently carries a Zacks Rank #4 (Sell).
Franklin Resources, Inc. BEN: This company, which is one of the most well-known global asset managers, joined the Bitcoin ETF race by applying for one in September. Franklin’s expected earnings growth rate for the current year is -10%. However, it is projected to grow at a rate of 15.9% in 2024. IVZ currently carries a Zacks Rank #4.
Fidelity Investments, one of the largest investment management companies in the world, is also eagerly awaiting SEC approval. Fidelity had applied to launch a Bitcoin exchange-traded fund in late June 2023.
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