Financial institutions are rushing to take a fresh look at crypto assets (virtual currencies).
returning institutional investors
BlackRock, the world’s largest asset manager, last week applied for a Bitcoin (BTC) exchange-traded fund (ETF). This week, another major asset manager, Invesco, also re-applied for a Bitcoin ETF. In addition, Wisdom Tree has reapplied. WisdomTree’s initial application was rejected by the U.S. Securities and Exchange Commission (SEC) in 2022.
In other news other than Bitcoin, cryptocurrency exchanges backed by Fidelity Digital Assets, Charles Shwab and Citadel Securities have launched in the US and Germany The bank has applied for a digital asset license in Germany.
Yes, financial institutions are back. But why did $10 trillion asset management firm BlackRock and $1.5 trillion Invesco decide it was time for a Bitcoin ETF again? Many people make complex and conspiratorial hypotheses.
For example, BlackRock is desperate to bail out Coinbase for some reason. Big financial institutions are trying to keep self-custody bitcoin out of people’s hands instead of the SEC. The hypothesis is that Wall Street doesn’t think the crypto industry can get too far ahead of itself.
There are others, but some are much simpler. Financial institutions love to make money, and offering a Bitcoin ETF is a way to make money.
black rock motivation
Now let’s focus on Black Rock. BlackRock has (actually has) customers, customers have (actually have) money they want BlackRock to keep with them, and they want BlackRock to manage their money. Let’s assume that they are willing to pay (and they are) and that BlackRock listens to their customers (and most of the time they do).
It is not hard, then, to believe that there is enough customer demand for “crypto exposure” that there is value in offering customers crypto exposure. Of course, we will receive a commission in return.
It’s another story that BlackRock considered the Bitcoin ETF to be the lowest hurdle way to offer its clients exposure to crypto assets. BlackRock can only make money if the application is approved. So far, all 10+ Bitcoin ETF applications have been rejected by the SEC. However, there is reason to believe that BlackRock’s filing will meet the SEC’s market surveillance and disclosure requirements.
Indeed, the lowest hurdle for Bitcoin ETFs is that, as CoinDesk’s David Z. Morris pointed out, the SEC “will burn the crypto industry and sprinkle salt on it.” because it is dedicated to This, on the other hand, makes it clear that there is no problem with Bitcoin and the problem is with crypto assets named securities.
But BlackRock isn’t particularly fond of Bitcoin or cryptocurrencies in general. In fact, BlackRock CEO Larry Fink once called Bitcoin a “monetary of money laundering.” If the bitcoin ETF is approved, BlackRock may work on other crypto-related products in the future.
In my opinion, BlackRock, perhaps the most powerful company on Wall Street, would not have filed this application if it had not thought it would be approved.
Conversely, on a more conspiratorial line of thinking, there may be a secret ruse to make Bitcoin look utterly unattractive by not even getting BlackRock to approve the Bitcoin ETF. unknown.
Maybe it’s still a naive way of thinking. There may be a reason why the application for Bitcoin ETF has continued without knowing something. But in the end it all boils down to one simple explanation.
Financial institutions love to make money, and Bitcoin ETFs are a way to do that.
｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda
｜Image: Sean Pavone / Shutterstock.com
｜Original: A Straightforward Explanation for Why Financial Giants Want to Issue a Spot Bitcoin ETF