Source: CNBC
Compile: WEEX Exchange
“The move into the cryptocurrency space fits into the asset management giant’s broader mission of creating easy-to-use, low-cost products for investors,” BlackRock CEO Larry Fink said on CNBC’s “Squawk on the Street” on Friday (July 14). “We believe we have a responsibility to democratize investing. We’ve done a great job, and ETFs are changing the way investing is done around the world. We’re just getting started.”
BlackRock (BlackRock) applied for a spot bitcoin ETF on June 15, which seems to have spurred the rise of cryptocurrencies and a series of competing applications from other asset management companies (click to see "BlackRock CEO's latest response: Bitcoin is an international asset, ETF will promote the democratization of cryptocurrency investment" ) . The iShares Bitcoin Trust for this application does not include management fees.
The U.S. Securities and Exchange Commission (SEC) has previously rejected dozens of applications for similar funds, but BlackRock’s involvement and the Surveillance Sharing Agreement (SSA) proposed in its filing is widely seen by the crypto industry as a sign that things are changing.
"We're working with regulators because like in any new market, if BlackRock's name is on it, we're going to make sure it's safe and secure and protected," Fink said.
Fink has previously been critical of cryptocurrencies, saying in 2017 that the popularity of digital currencies is largely due to money laundering.
However, client interest and high transaction costs have prompted BlackRock to carefully consider entering the space, Fink said. He also added that cryptocurrencies can play a diversifying role in clients' portfolios.
“It has unique value compared to other asset classes, and more importantly, it is so international that it will outperform any one currency,” Fink said.
However, due to the silence period, Fink declined to directly discuss the spot bitcoin ETF.
BlackRock reported second-quarter results on Friday, with adjusted earnings of $9.28 a share on revenue of $4.46 billion. According to disclosures, BlackRock currently manages more than $9 trillion in assets.
WEEX added:
It has been 10 years since the submission of the first spot BTC ETF application document. Now that BlackRock has joined, the encryption industry has seen the dawn again, so it is highly anticipated.
In the past 10 years, although the United States has not approved any spot BTC ETF, we are no strangers to similar products, such as Grayscale Bitcoin Trust GBTC, futures ETFs, spot ETFs from other countries, and private equity funds. According to incomplete statistics, the cumulative assets managed by these similar products have reached 28.8 billion US dollars, of which 27.6 billion US dollars have been invested in spot products.
However, existing investment products have some shortcomings, and spot ETFs can make up for it to a large extent—it has better liquidity than private equity funds, lower tracking error than trust/closed-end funds, and lower handling fees than GBTC, so this is one of the reasons why spot ETFs are expected.
In addition, as a product listed and traded on traditional exchanges such as Nasdaq, ETF can provide better investor protection and more standardized information disclosure, especially greatly reducing the entry threshold for investors, which is what Larry Fink calls investment democratization-anyone can buy and sell spot BTC ETFs through their securities brokers like buying stocks and funds in the past, so that BTC can fly into the homes of ordinary people.
So, how much capital inflow imagination can ETF bring to the encryption market? Let's take a gold ETF as an analogy. According to NYDIG data, as of the end of June 2023, the global asset management scale of gold ETFs has exceeded 210 billion US dollars. In contrast, Bitcoin (28.8 billion US dollars) as "digital gold" still has 6.3 times room for growth (181.2 billion US dollars).
Recommended reading:
< END >
