Introduction
Larry Fink, CEO of BlackRock, believes that the firm’s pursuit of a spot Bitcoin ETF has the potential to “democratize” the world of cryptocurrency. In an interview with Fox Business, Fink emphasized BlackRock’s goal of making crypto more accessible and cost-effective for investors by addressing the high bid-ask spread associated with digital assets.
BlackRock’s Bitcoin ETF Proposal
BlackRock announced its plans for a spot bitcoin ETF in early June, intending to launch an iShares Bitcoin Trust. The proposal involves Coinbase serving as the Bitcoin custodian and operator, following a surveillance-sharing agreement. This strategy, employed by other recent spot bitcoin ETF applicants like ARK and Fidelity, aims to strengthen the applications and increase the likelihood of SEC approval.
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Navigating Regulatory Challenges
While BlackRock has a successful track record of ETF applications, having faced only one denial since 2014 out of over 575 submissions, the SEC’s stance on cryptocurrencies has become stricter. The regulatory authority recently filed a lawsuit against Coinbase for operating as an unregulated exchange. BlackRock, along with other applicants, has encountered hurdles with the SEC and had to revise their applications to explicitly mention Coinbase.
Fink’s Evolving Perspective on Crypto
Larry Fink’s stance on cryptocurrency has evolved over time. Previously expressing bearish views, citing concerns about money laundering, he now recognizes the potential of digital assets. In late 2020, Fink acknowledged the significance of Bitcoin, and BlackRock’s Chief Investment Officer, Rick Rieder, even suggested that Bitcoin could replace gold.
Fink’s Vision for Crypto
Fink continues to advocate for the role of crypto, stating that it is essentially digitizing gold and referring to Bitcoin as an “international asset.” In his annual letter to investors, Fink expressed concerns about the United States lagging behind in terms of innovation and reaffirmed BlackRock’s commitment to exploring digital assets.
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Stay tuned for further developments on BlackRock’s spot bitcoin ETF application as they navigate the regulatory landscape and work towards realizing their vision of democratizing cryptocurrency.
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Written by Agbo Obinnaya
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