On Friday, crypto prices rose after BlackRock filed for a spot bitcoin exchange-traded fund (ETF) in the United States. Bitcoin rose 3.75% to $26,355.04, while ether climbed 3% to $1,718.32. Altcoins also increased, with Solana and Cardano tokens gaining 4.5% and 2% respectively. Binance Coin rose 2.75%, litecoin gained 3%, and the Uniswap token climbed 4%. Despite this increase, Bitcoin still closed the week with a slight decline of 0.21%, while Ether posted a second consecutive weekly decline of 10.84%.
BlackRock, the largest asset manager in the world, filed for a spot bitcoin ETF with Coinbase as its crypto custodian. This move is significant as it would become the first approved ETF in the U.S. to track the price of bitcoin, versus the futures contracts tied to the cryptocurrency. Bitcoin is an important asset class as it offers diversification, with a different risk profile than traditional financial markets. The approval of the ETF would lead to more institutional investors adding bitcoin to their portfolios, institutionalizing the market in a way that is not currently possible.
SEC’s Battle with Crypto Industry
Investors are weighing the latest development in the crypto industry’s battle with the U.S. Securities and Exchange Commission (SEC) for regulatory recognition and guidance. Every application that has gone through the SEC for a potential spot bitcoin ETF has been rejected since the first filing about 10 years ago. The filing comes about a week after the SEC sued its crypto custody partner, Coinbase, for violating securities laws, leaving many questioning the timing of BlackRock’s application.
Gustavo Schwenkler, an associate professor at the Leavey School of Business at Santa Clara University, stated that if BlackRock’s ETF is approved, it would institutionalize the market in a way that is not possible right now. The commitment to Coinbase is almost as important near-term as the commitment to bitcoin is in the long term, according to Mark Connors, head of research at 3iQ.
BlackRock’s filing for a spot bitcoin ETF with Coinbase as its crypto custodian has led to an increase in crypto prices. The approval of the ETF would lead to more institutional investors adding bitcoin to their portfolios, institutionalizing the market in a way that is not currently possible. However, the timing of BlackRock’s application, following the SEC’s lawsuit against Coinbase, has left many questioning the motives behind the move.