Global asset management giant BlackRock has officially filed an application with the US Securities and Exchange Commission (SEC) to launch a Bitcoin-based exchange-traded fund (ETF). This announcement brings new hope to the crypto community and could revolutionise the accessibility and adoption of Bitcoin by investors.
Partnership with Coinbase for the custody of Bitcoins
BlackRock has teamed up with Coinbase, one of the leading cryptocurrency exchange platforms in the US, to act as custodian for the Bitcoins that will form the reserve of the future ETF. The two companies had already worked together last year to launch a Bitcoin trading service. The iShares Bitcoin Trust, the name given to this ETF, aims to offer investors indirect exposure to Bitcoin through the world’s largest asset manager.
Bullish sentiment in the crypto community
The news of BlackRock’s application to create a Bitcoin Spot ETF has sparked renewed optimism among cryptocurrency traders. The price of Bitcoin quickly regained the $25,500 level last Friday. Tokens such as Polygon Network’s MATIC and Cardano’s ADA also rose slightly, ending their losing streak. Dogecoin led the rise among major cryptocurrencies with a 4% gain over the past 24 hours and Litecoin recording a 3.3% increase. In addition, bearish bets on Bitcoin saw more than $16 million in short liquidations over the last 24 hours.
A new impetus for the adoption of Bitcoin in the United States?
The Bitcoin Spot ETF has long been considered the Holy Grail for attracting large sums of capital into the Bitcoin world in the US. So far, several asset managers have tried unsuccessfully to get SEC approval. If the iShares Bitcoin Trust ETF is approved, it could pave the way for a massive influx of new investors and change the game in the Bitcoin market.
Why is the Bitcoin ETF so important?
- Accessibility: A Bitcoin ETF would give institutional and retail investors easy access to the Bitcoin market, without having to buy and hold Bitcoins directly.
- Security: Setting up a Bitcoin ETF guarantees a high level of security for investors, thanks to the custody provided by trusted financial institutions such as Coinbase.
- Liquidity: An ETF would promote greater liquidity in the Bitcoin market, which could help to reduce price volatility and facilitate transactions.
- Visibility: The adoption of a Bitcoin ETF by a major player such as BlackRock would give greater visibility to the cryptocurrency market, making it more attractive to other institutional investors.
What are the consequences for the crypto ecosystem?
However, some are questioning the repercussions of BlackRock’s entry into the Bitcoin world. Cardano founder Charles Hoskinson has raised questions of ethics, mental state and greed raised by Bitcoin advocates who support BlackRock’s initiative. Nevertheless, it is undeniable that the approval of a Bitcoin spot ETF by the SEC could radically change the perception of the public and financial institutions towards cryptocurrencies, and drive a new dynamic in the adoption of Bitcoin. To conclude, although BlackRock’s ETF application is still in its early stages, it represents an important milestone for the future of Bitcoin and cryptocurrencies. The next few months will be critical in determining whether this ETF will see the light of day and what impact it will have on the market and adoption of Bitcoin.
