In a report from Business Insider, the cryptocurrency exchange provider, Coinbase, has been liaising with Blackrock, a US investment management company with approximately $6 trillion in total assets. Sources who know the situation said that Coinbase has sought guidance from BlackRock`s blockchain working group. This news has been reported on other outlets as well.
The ever-elusive bitcoin ETF has been tried by several key financial institutions and some large cryptocurrency specialty traders and investors – all of whom have had their requests and presentations rejected by the Securities and Exchange Commission or the SEC. Recently, the SEC has reviewed a total of 9 bitcoin ETFs, again all rejected thus far. One reason regulators are holding back on the ETF component of the market is that they feel that markets are not mature enough to protect against manipulation – a problem that seems to come from the deepest parts of the bitcoin. Digital currency markets are still like the Wild Wild West, despite the watchful eye of regulators.
The rationale for an ETF product that tracks Bitcoin or a product that is composed of various coins, is that it would open the way for new funds to flow into this ecosystem. Such a path to trade these products would allow investors to trade and take risk in said coins, without having to navigate cryptocurrency exchanges and wallets.
According to sources the Coinbase ETF would be different in that it (according to Business Insider), would track its own index of cryptocurrencies which includes bitcoin, ether, litecoin, ethereum classic and bitcoin cash.
We at Classiarius believe that this market is maturing and in the future will eventually see a host of products traded by institutional investors. Again, in our view, the 2017 and 2018 cryptomarket is much like the 1994 to 1995 period for the internet. Things are just getting started.