Reading 3 min Published Updated
BlackRock’s latest bitcoin (BTC) spot trust filing will boost investor confidence in bitcoin and could even be the “best thing that could happen” to BTC, according to some cryptocurrency industry watchers, but others warn of hidden costs.
During an interview on June 16, Galaxy Digital CEO Mike Novogratz said that the approval of BlackRock’s ETF bid would be “the best thing that could happen to $BTC.”
“Every evening, I rejoice that Larry Fink and @blackrock created the @bitcoin ETF,” Novogratz said in a Fox News segment.
— Mike Novogratz (@novogratz) June 16, 2023
Meanwhile, crypto analyst James Edwards of Finder.com — a financial product comparison website — told Cointelegraph that BlackRock’s filing timeline should provide “confidence” to both Bitcoin as an asset and Coinbase in its upcoming legal battle with the SEC:
“BlackRock’s willingness to promote Bitcoin ETFs at a time when the SEC is on the warpath against cryptocurrencies is very revealing. This demonstrates confidence in Bitcoin’s status as a commodity and not a security,” he said, adding:
“It is unlikely that BlackRock will promote this kind of ETF without serious regulatory consultation and confidence in the future legal status of Bitcoin.”
Edwards explained that BlackRock’s intention to use Coinbase Custody to control funds should also be seen as a powerful credibility boost for Coinbase as it prepares its legal defense.
He added that BlackRock – the world’s largest asset manager – most likely would not have partnered with Coinbase if it had not been “confident” in Coinbase’s legal position.
Others argue that the traditional investment giant’s latest moves undermine the “ethos” of decentralized cryptocurrencies, or that the company may find a way to profit from retail investors.
Investor Scott Melker explained in an interview on June 16 that such an approval would be a disservice to the crypto innovators who built the industry:
“As good as it is for the institutional acceptance of the space, it kind of breaks the ethos, it’s a bit of a dishonest push back from the people who built the industry in the United States.”
Cinneamhain Ventures partner and Ethereum bull Adam Cochran believes BlackRock will pounce on retail investors’ “discount coins”, a theory also shared by Melker.
Blackrock ETF… https://t.co/3g77QNdAun
— The Wolf Of All Streets (@scottmelker) June 15, 2023
Steven Lubka, managing director of Swan Bitcoin, shares a similar view, predicting that BTC will hit $1 million, but few retail investors will be rewarded because BlackRock, Goldman Sachs, and other ETF issuers will hold most of BTC.
Melker added that Wall Street firms will continue to enter the market and that US regulators are likely to “select them” over existing platforms.
Related: Bitcoin ETF: A Beginner’s Guide to ETFs
ARK Invest, Grayscale, Fidelity, Galaxy Digital, VanEck, Valkyrie Investments, NYDIG, SkyBridge and WisdomTree are among other investment companies that have filed with the SEC for similar bitcoin and cryptocurrency ETFs.
Since the news was first published, the price of BTC has risen 2.2% to $25,584 at the time of writing.
Interestingly, the Fear & Greed cryptocurrency index increased from 41 to 47 – moving out of the fear zone – following the news of the BlackRock filing.