Some crypto industry watchers say BlackRock's latest spot bitcoin (BTC) trust filing will boost investor confidence in bitcoin and could even be the “best thing that can happen” to BTC but others warn There are hidden costs.
In a June 16 interview, Galaxy Digital CEO Mike Novogratz said that approval of BlackRock's ETF application would be “the best thing that can happen to BTC.” According to a tweet from host Liz Claman, Novogratz said on Fox News: "I say Hail Mary for the @bitcoin ETF every night for Larry Fink and @blackrock." Meanwhile, James Edwards, a cryptocurrency analyst at financial product comparison site Finder.com, told that the timing of BlackRock's filing should provide “confidence” in Bitcoin as an asset and in Coinbase's upcoming legal battle with the SEC:
“BlackRock's willingness to continue launching a bitcoin ETF at a time when the SEC is against cryptocurrencies is telling. It shows confidence in bitcoin's status as a commodity rather than a security,” he said, adding Added: “BlackRock is unlikely to la punch an ETF of this nature without serious consultation with regulators and confidence in Bitcoin's future legal status."
BlackRock's intention to use Coinbase Custody to control funds should also be seen as a huge confidence booster for Coinbase as it prepares its legal defense, Edwards explained. He added that if BlackRock the world's largest asset manager might not work with Coin base, they don't have “confidence” in Coinbase's legal status. Others believe that the traditional investment giant's latest move has disrupted the "ethos" of decentralized cryptocurrencies, or that the firm may find a way to profit from retail investors.
Investor Scott Melker explained in a June 16 interview that such an approval would be detrimental to crypto-native innovators building the industry: "While this may be beneficial for institutional adoption of the space, it's a bit against the ethos and a bit disingen ous in excluding people who built the industry in the United States." Cinneamhain Ventures partner and ethereum bull Adam Cochran believes that BlackRock will make a big move into “discount tokens” for retail investors, a theory Melk agrees with. Steven Lubka, managing director of Swan Bitcoin , took a similar view, predicting that BTC will reach $1 million, but few retail investors will be rewarded because the majority of BTC will be held by BlackRock, Goldman Sachs and other ETF issuers.
Melker added that Wall Street firms will continue to enter the space and US regulators may "choose them" over existing platforms. Investment firms such as ARK Invest, Grayscale, Fidelity, Galaxy Digital, VanEck, Valkyrie Investments, NYDIG, SkyBridge and Wisdom Tree have filed with the SEC for similar bitcoin and cryptocurrency ETFs.
Since the news was first reported, the price of BTC has risen 2.2% to $25,584 at the time of writing. Interestingly, following the news of the BlackRock filing, the Fear & Greed Crypto Index rose from 41 to 47 out of the fear zone.
