Per a Coindesk report, BlackRock, the world’s largest asset manager, is reportedly getting closer to filing an application for a Bitcoin (BTC) Exchange-Traded Fund (ETF) in the United States.
According to an anonymous source familiar with the matter, the company will use Coinbase (COIN) Custody for the ETF and the cryptocurrency exchange’s spot market data for pricing.
Could BlackRock’s ETF Filing Push Bitcoin Higher?
This news has caused a stir in the cryptocurrency community, with many speculating that a Bitcoin Spot ETF from BlackRock could have a bullish impact on the digital asset’s price.
An ETF is a type of investment vehicle that tracks the performance of an underlying asset, such as a stock, commodity, or in this case, Bitcoin. An ETF holds a portfolio of assets that reflects the composition of the underlying asset it is designed to track.
In the case of a BTC ETF, the fund would hold Bitcoin and track its price movements. Investors can buy and sell shares in the ETF, which would expose them to Bitcoin without having to purchase or hold the digital asset themselves directly.
The potential for a BTC ETF from BlackRock is significant for several reasons. Firstly, it would make investing in BTC easier for institutional investors. Many institutional investors hesitate to invest in Bitcoin due to regulatory concerns and a lack of infrastructure for holding and trading the digital asset.
A Bitcoin ETF would provide a more accessible and regulated way for institutional investors to gain exposure to the largest cryptocurrency in the market.
Secondly, approving a BTC Spot ETF could increase demand for Bitcoin, potentially driving up its price. As more investors gain exposure to BTC through the ETF, the demand for the digital asset could increase, leading to a potential boost in its price.
On the other hand, Coinbase Custody is a service that provides secure storage for digital assets, while the company’s spot market data is used to determine Bitcoin’s price.
However, it is important to note that the Securities and Exchange Commission (SEC) has rejected every application for a spot BTC ETF in the past. The SEC has only approved Bitcoin futures ETFs for trading. Whether BlackRock’s application will pass under the current regulatory environment remains to be seen.
BlackRock has not commented on the reports of its Bitcoin ETF application, and Coinbase has declined to comment.
Overall, the possibility of a BTC ETF from BlackRock is a significant development for the cryptocurrency industry. If approved, it could positively impact Bitcoin’s price and potentially provide the digital asset with the impetus it needs to surpass its nearest resistance level and break its current downtrend price action.
As of this writing, BTC has taken a significant impact and has dropped over to the $24,700 mark. However, it has rapidly conquered the $25,000 line, and it’s currently consolidating above this key level.
Featured image from Unsplash, chart from TradingView.com