By George Ward
Following the reports that BlackRock has filed for approval to launch a spot Bitcoin (BTC) Trust, some industry observers are optimistic that this could drive investors’ confidence in Bitcoin. According to them, this might be the “best thing to happen” to Bitcoin, but others are cautious of the cost implications of the new product.
The “Best Thing To Happen” To BTC
In an interview aired on June 16, Mike Novogratz, CEO of Galaxy Digital, expressed his belief that approving BlackRock’s exchange-traded funds (ETF) proposal would bring unprecedented benefits to the Bitcoin network. Novogratz’s words echoed a sense of hope as he revealed, “Every evening, I offer up a heartfelt prayer, wishing for Larry Fink and the entire BlackRock team to launch an investor-friendly Bitcoin ETF successfully.”
James Edwards, a renowned crypto analyst and a top-level executive at Finder.com, a prominent financial product comparison website, shared his insights about the soon-to-be-launched ETF. Edwards opined that BlackRock’s strategic decision to file for a Bitcoin ETF during a period when the Securities and Exchange Commission (SEC) is actively pursuing regulatory actions against most crypto platforms is significant.
He noted that the move is a testament to the confidence in Bitcoin’s classification as a commodity rather than a security. The analyst further emphasized that this move by BlackRock also has implications for Coinbase as the crypto firm prepares for its legal battle with the securities watchdog.
According to Edwards, BlackRock’s decision to utilize Coinbase Custody for its fund management is a remarkable vote of confidence in Coinbase as it readies itself for its legal defense. The renowned crypto analyst emphasized that such a partnership between two industry giants would only have materialized if BlackRock was thoroughly convinced of Coinbase’s solid position in the ongoing legal tussle.
Concerns Over BlackRock’s Move
However, some dissenting voices claim that the recent actions taken by the traditional investment powerhouse challenge the fundamental principles of the decentralized digital asset ecosystem. Some skeptics even argue that the company might exploit retail investors to their advantage.
While sharing his thoughts about the development during a recent interview, Investor Scott Melker voiced his concerns, stating that the approval of BlackRock’s ETF application would unjustly undermine the efforts of crypto-native innovators who have played a crucial role in shaping the industry. Melker points to the potential negative impact such a decision could have on those individuals who have dedicated their expertise and resources to building and promoting the cryptocurrency space as a decentralized ecosystem.
Adam Cochran, a partner at Cinneamhain Ventures and an ardent Ethereum supporter, suggests that BlackRock may take advantage of the situation to acquire discounted cryptocurrencies from retail investors. Cochran’s view aligns with the concerns raised by Melker, highlighting a shared perspective regarding BlackRock’s potential motives in the cryptocurrency market.
They claim that BlackRock could capitalize on the vulnerability of retail investors during this period of uncertainty and acquire digital assets at reduced prices, resulting in a profit-making opportunity for the investment giant.
Since the news of BlackRock’s proposed ETF application made the rounds, the price of Bitcoin has been on the rise, trading at $25,565 with a 2.3% increase, according to Coingecko data at the time of writing.