A Bitcoin (BTC) Exchange-Traded Fund (ETF) in the United States may soon be on the horizon, as revealed by Coindesk, the biggest asset manager in the world.
Coinbase (COIN) Custody will be used for the ETF, and spot market data from the cryptocurrency exchange will be used for pricing, according to an unnamed individual familiar with the situation.
Crypto enthusiasts are up in arms over this development, with some predicting a positive effect on Bitcoin’s value as a result of BlackRock’s planned Bitcoin Spot ETF.
An exchange-traded fund (ETF) mirrors the price movement of a certain asset, such as a stock index, a basket of commodities, or Bitcoin. Exchange-traded funds (ETFs) contain a portfolio of assets that mirrors the make-up of the asset they are meant to track.
A Bitcoin exchange-traded fund (ETF) would invest in Bitcoin and follow its value on the market. Shares of the ETF may be bought and sold by investors to provide them exposure to Bitcoin without requiring them to actually acquire or hold Bitcoin.
There are several reasons why a BlackRock Bitcoin ETF would be a big deal. For starters, it would simplify Bitcoin investment for large financial institutions. Regulatory uncertainty and an absence of exchange and storage facilities for Bitcoin make many institutional investors wary of digital currency.
Institutional investors would be able to obtain exposure to the market leader in cryptocurrencies via an exchange-traded fund (ETF) for Bitcoin.
Second, Bitcoin’s price may go higher if demand increases when a BTC Spot ETF is approved. BTC’s price may rise if more investors buy into the digital currency after learning about it via the ETF.
The price of Bitcoin is established using the company’s spot market data, while Coinbase Custody offers safe storage for digital assets.
Only Bitcoin futures ETFs have been given trading approval by the SEC. It is unclear at this time whether the present regulatory climate would allow BlackRock’s application to be approved.
Neither BlackRock nor Coinbase have addressed the rumours around BlackRock’s Bitcoin ETF filing. In general, BlackRock’s consideration of launching a Bitcoin exchange-traded fund is a major step forward for the cryptocurrency market. If it passes, it might have a favourable effect on the price of Bitcoin and give the digital currency the boost it needs to break its current decline.
As of the time of this writing, BTC has suffered a major hit and has fallen below the $24,700 threshold. But now it has quickly surpassed $25,000 and is consolidating above that mark.
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