The current crypto market is dealing with a bearish trend in the last months. The good news is that regulatory clarity is slowly gaining traction and this could attract institutional investors to enter the picture. Bitcoin in 2017 was able to go from around $1000 to near $20,000 in just a matter of 12 months. But now, Bitcoin is trading just around $6,200 to $6,500. Considering the capital that institutional investors can bring to the market, it is possible that it can be a game changer.
A Bitcoin ETF could change the landscape of the crypto market today. Unfortunately, the US Securities and Exchange Commission has rejected a number of Bitcoin ETF applications citing the possibility of price manipulation. Among the application that was rejected was the one submitted by the Winklevoss twins. It is the second time that Cameron and Tyler Winklevoss attempted to submit their Bitcoin ETF application.
And now, the one that has been submitted by Solid X and VanEck is the ones that is seen by most experts that have the strongest chance of getting approved.
A Bitcoin ETF can make it easier for institutional investors to participate in the market. However, you have the likes of Andreas Antonopoulos who thinks that a Bitcoin ETF is a terrible idea considering that what you are getting is basically a share in their fund and not an actual Bitcoin.
BlackRock Won’t Dabble on a Bitcoin ETF
Recently, BlackRock CEO Larry Fink mentioned to the New York Times Dealbook Conference that the world’s largest asset manager isn’t going to launch a crypto-related ETF until the industry matures. Right now, BlackRock oversees around $6.4 trillion worth of assets. According to Fink, “I wouldn’t say never, when it’s legitimate, yes”.
He also added that “It will ultimately have to be backed by a government”. He mentioned that “I don’t sense that any government will allow that unless they have a sense of where that money’s going for tax evasion and all of these other issues”.
Anonymity of Bitcoin
Fink also pointed out another risk factor. He considered Bitcoin’s anonymity as a risk. He mentioned that the cryptocurrency has been used to facilitate illegal transactions from illicit goods to money laundering. In fact, Bitcoin has been a choice for criminals all over the world. Fink mentioned that “I do see one day where we could have electronic trading for a currency that could be a store of wealth”. He also added that “But right now, the world doesn’t need a store of wealth unless you need that store of wealth for things you should not be doing”.
But of course, this is not quite accurate considering how exchanges nowadays have asked users for identification. Also, cryptocurrencies that have been providing users with an extra layer of anonymity such as Monero has even been de-listed in some countries.
But when it comes to blockchain, that is a totally different story. He said that BlackRock is a “huge believer in blockchain”. When it comes to blockchain tech, Fink agrees with other Wall Street CEOs such as Jamie Dimon of JP Morgan.