BlackRock nears launch of Bitcoin ETF, potential impact on BTC price.
Reports are circulating in the financial world that BlackRock, the largest asset manager in the world, is considering applying for a Bitcoin Exchange Traded Fund (ETF). This is a significant move by one of the most influential financial institutions into the world of cryptocurrencies.
The excitement is growing as it has been revealed that BlackRock plans to use Coinbase Custody for the ETF, alongside the crypto exchange’s spot market data for pricing. This partnership represents a significant step in legitimizing cryptocurrencies in traditional finance.
Interestingly, Bitcoin (BTC) and Coinbase (COIN) have not reacted to the news, but both assets continue to decline, with BTC down 3.9% and COIN down 2.81% in the past 24 hours.
BlackRock’s Foray Into Crypto
This move marks a continuation of the collaboration that began last year when BlackRock partnered with Coinbase to offer crypto directly to institutional investors.
- Bitcoin correlation with stocks hits 5-year low due to regulatory crackdown.
- Crypto trading volumes hit yearly lows in Q2.
- BlackRock to file for Bitcoin ETF.
The specifics about the nature of the ETF, whether it will be spot or futures, have not been disclosed yet. The Securities and Exchange Commission (SEC), which is responsible for regulating ETFs in the U.S., has previously turned down every application for a spot Bitcoin ETF. However, several Bitcoin futures ETFs have gained approval from the regulatory body for trading, indicating a gradually warming stance towards cryptocurrencies.
Potential Impact On Bitcoin Price
The news of BlackRock’s potential Bitcoin ETF could have a significant impact on BTC’s price. Creating such an ETF would allow a broader range of investors to gain exposure to Bitcoin, possibly driving up demand and its price.
ETFs make it easy for institutional investors to gain exposure to Bitcoin, opening up a substantial new demand avenue. Analyst crypto Daan Crypto reported that Bitcoin had recorded a strong spot bid on Binance in the past few hours – a move that has not been seen for the past few days.
According to the trader, Bitcoin’s local bottom is more likely if the asset continues to decline in the coming days. At the time of writing, BTC currently trades at $24,977, down by nearly 4%. Its trading volume has also spiked over the past 7 days, indicating massive trading activity.
From a technical perspective, BTC could still be prone to a continuous downtrend, given that the asset hasn’t hit major support found in the order block at $24,500.
Furthermore, the association with BlackRock, a globally recognized asset management name, could lend credibility and legitimacy to Bitcoin. This increased trust could lead to greater adoption rates and an upward price trajectory for Bitcoin in the long run.
As observed in the past, any positive development or news about BTC ETFs has often led to a spike in Bitcoin’s price due to increased demand from retail and institutional investors.
Featured image from iStock, Chart from TradingView
