BlackRock (NYSE: BLK), the world’s largest asset manager, made a surprising move in the cryptocurrency world by applying for a spot Bitcoin (BTC) exchange-traded fund (ETF). This decision marked a significant shift, considering the firm’s previous skepticism towards cryptocurrency.
The firm’s skeptical stance was evident in a 2018 interview when BlackRock’s CEO, Larry Fink, stated that the company’s clients had shown no interest in cryptocurrency. He emphasized that the firm saw no need to prepare for offering digital asset-related products.
During the Bloomberg interview on July 16, 2018, Fink acknowledged the importance of blockchain technology but dismissed the possibility of BlackRock’s clients seeking exposure to cryptocurrencies.
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“I don’t believe any client has sought out crypto exposure. <…> I have not heard from any one client that they’re looking to buy a cryptocurrency,” he said.
Triggers for possible entry in crypto
However, Fink did mention that the company would consider crypto investments only when established structures and a sense of legitimacy are in place.
It is worth noting that since then, the cryptocurrency market has witnessed a surge in institutional players and market capitalization, despite ongoing uncertainties surrounding regulations.
“When it becomes more legitimatized, when it has the true open nature of it that you identify who the players are on both sides, that’s when we’ll probably look at it as an alternative as an alternative to all currencies,” Fink added.
BlackRock’s move to crypto
Since that interview, BlackRock has taken several initiatives to embrace the crypto sector. In March 2022, the firm announced that it was actively studying digital currencies, stablecoins, and the underlying technologies in response to growing client interest.
Moreover, in August 2022, BlackRock partnered with Coinbase to provide select institutional clients with direct access to Bitcoin.
While awaiting feedback from the Securities and Exchange Commission (SEC), BlackRock has garnered a positive reputation with the regulator, as highlighted in a Finbold report. Notably, BlackRock’s track record of SEC-approved ETFs impressively stands at 575-1.
If the spot ETF application receives approval, it could have far-reaching implications for the overall cryptocurrency market. It’s worth noting that the SEC has not yet approved any spot Bitcoin ETFs, although it has given the green light to Bitcoin futures-based ETFs in the past.
The introduction of a spot product is expected to exert a significant influence on the value of the cryptocurrency market.
