Coinbase plans to set up their own Bitcoin ETF

Coinbase, the US-based crypto brokerage has made public its intentions to create its own exchange–trade fund (ETF) in conjunction with popular Wall Street investment management firm, BlackRock.

Coinbase is looking to get into the ETF space at a time where Bitcoin ETFs seem to be a hot potato in the cryptocurrency space, particularly when so many other Bitcoin ETF applications have been rejected subject to appeal by the Securities Exchange Commission (SEC) due to the ‘volatility’ of crypto assets.

Tight-lipped on the plan of action

At this point, Coinbase has yet to divulge any information regarding how they plan to approach the concerns of the SEC. Regardless, it appears that Coinbase will try to strengthen their case for a Bitcoin ETF through providing strong institutional backing from BlackRock (a notable $6 trillion asset manager that has been looking for an entry into the cryptocurrency space in the last 3 months).

Which way is BlackRock going?

According to a source at BlackRock, the firm still cannot firm whether it will indeed be working with Coinbase in collectively pursuing a cryptocurrency ETF. The firm have put forth conflicting statements on their stance on cryptocurrencies and on blockchain technology in the past. BlackRock’s involvement with blockchain dates back to 2015, where it has apparently been on a constant search for a way to implement the blockchain technology across its products and services. At present, BlackRock has a blockchain division, which offers a number of ETFs through iShares, a subsidiary. At the same time, BlackRock have appeared to be sceptical regarding taking up cryptocurrency if previous statements by its CEO Larry Flink are anything to go by. Ironically, the company was recently quoted over expressing their optimism for cryptocurrencies:

Like most financial institutions, BlackRock has had a working group since 2015 that meets periodically to exchange information on blockchain and consists of employees from various parts of the business. We have been looking at blockchain technology for several years, recognising potential for shared processes and data across market participants, clearing, settlement and reconciliation and simplified securities issuance.

ETFs and the impact on the crypto market

The second half of 2018 has seen ETFs become a pivotal topic in the crypto space. There is currently a widespread optimism amongst crypto enthusiasts that with just one successful ETF application, the current bear market will blow over, turning into a bullish one. With this prospective move by Coinbase in sight, the community eagerly awaits for more good news.

Nicholas

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Nicholas is Nicholas is a prolific technology writer and cryptocurrency enthusiast. He has been writing professionally for the last 6 years, especially on emerging technology. His current focus is on blockchain technology and cryptocurrency. He has been working with several local and international clients over the years to produce dependable, well researched and updated industry content. He loves travelling and spending time with family in his free time.

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