NEW YORK - BlackRock (NYSE:BLK), the world's largest asset manager with $8 trillion in assets under management, is proactively engaging with the U.S. Securities and Exchange Commission (SEC) to seek standardized regulatory treatment for spot market Bitcoin and Ethereum exchange-traded funds (ETFs). The firm is advocating for a regulatory approach that aligns with that of futures ETFs, emphasizing the similar reliance on spot markets by both types of investment vehicles.
The firm's recent actions, including the creation of an iShares Ethereum Trust in Delaware, signal its preparation for potential applications for spot ETFs. BlackRock has been transparent about its stance on the SEC's application of the Investment Company Act of 1940, arguing that the Act fails to address potential fraud risks associated with cryptocurrency markets that could affect ETFs' assets.
Despite these regulatory challenges, BlackRock remains optimistic about the prospects of launching its spot Bitcoin ETF by January 2024. If approved, this move could significantly impact the market, with an injection of up to $200 billion anticipated into Bitcoin. The SEC is expected to issue rulings on numerous ETF applications by November 17.
Meanwhile, Yassin Mubarak from Dizer Capital raised concerns over the absence of an XRP ETF, especially given its clear legal status following Ripple's victory in a lawsuit against the SEC. The legal clarity has not yet translated into an ETF offering for XRP, which is currently the fifth-largest cryptocurrency globally. This gap in the market persists even as firms like BlackRock show a keen interest in crypto ETFs, as evidenced by their registration of an Ethereum-based ETF.
As BlackRock and other large firms navigate the evolving landscape of cryptocurrency investments and regulations, the industry anticipates how these developments could reshape access to digital assets through regulated financial products like ETFs.
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