While the crypto markets are suffering yet another slump after Wednesday’s correction that saw the industry shed $38 billion of its total market cap, crypto ETF (exchange-traded fund) remains one of the main hopes of fueling its resurgence.
Coinbase, the San Francisco-based crypto exchange, is the latest company exploring the development of its own crypto ETF. The exchange currently offers a range of services for both retail and institutional investors, including a crypto trading platform, wallet for tokens based on the ERC-20 standard and most recently a custodial service, built specifically for institutions.
The company seems to be favored by large investors due to its regulatory compliance and conservative policy, as only the 5 major digital assets are available on the platform. The next venture of Coinbase is a crypto-based ETF – yet another way for Wall Street investors to enter the crypto market. The exchange could reportedly partner BlackRock on the project, the world’s largest asset manager, boasting $6.3 billion worth of assets under management.
According to a report by Business Insider, Coinbase has already held numerous conversations with the representatives of BlackRock’s blockchain division, hoping to gain valuable experience from a company that made its name via ETFs and hedge funds. iShares, its most popular ETF suite, accounts for $1.41 trillion of assets under management by BlackRock. To put it context, that is 7 times more than the entire crypto industry is worth right now.
However, the reports maintain that it, “remains unclear whether the talks were a one-off or part of ongoing conversations between Coinbase and BlackRock.” Various sources claim that the Coinbase crypto ETF would track not just bitcoin but a number of other major digital assets. It was also reported that BlackRock did not give any particular instructions on how to launch the ETF.
BlackRock has been exploring blockchain technology since 2015 in order to implement it across the financial services industry to increase efficiency and transparency. However its CEO Larry Fink stated the company is not interested in virtual currencies and has not seen enough interest from its clients. Mr. Fink went on to label BTC an “index of money laundering.”
Coinbase will join an increasing list of companies, hoping to land the SEC approval for the coveted crypto ETF. The Commission has recently rejected 9 Bitcoin ETF applications from 3 different companies but later announced it will be reviewing its ruling. Earlier this year, the Gemini proposal was also denied and now the crypto aficionados are putting their hopes on the VanEck/SolidX application, considered to have the best shot of being approved.
Notably, the chances of a crypto ETF might have slightly increased with the appointment of a new SEC Commissioner Elad Roisman. The 37-year-old has joined another pro-crypto commissioner Hester Peirce and his introduction might finally tip the scales in favor of the long-awaited crypto ETF. The SEC is set to announce its decision on the VanEck/SolidX proposal by September 30th.
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I have been following the crypto markets since mid 2017, just in time to witness the incredible surge of the digital asset industry. Fascinated by the potential of blockchain technology I’ve started to dig deeper and that’s how I ended up meeting the Toshi Times team. I hold a Political Science degree, therefore the crypto regulation development is particularly interesting for me. I’m also heavily involved with music, running my own label, a YouTube channel and working with distribution. People call blockchain the ‘Fourth Industrial Revolution’ and I believe it will change our daily lives in the coming years and we will have the front row seats to witness it.