With all the recent discussion of Bitcoin exchange-traded funds (ETFs), a near-consensus seemed to have been reached on the state of play. The vast majority of commentators in the crypto world seem to have concluded that the VanEck / SolidX ETF is the sector’s best hope for an exchange-traded instrument. Indeed for some it appears almost the only hope for a bounce in the deepening bear market of 2018. But huge news today suggests an even more high-profile partnership is to enter this, potentially crypto’s most lucrative arms race to date. Market-leading broker and exchange Coinbase have unveiled plans to work alongside multi-trillion dollar fund managers and ETF pioneers BlackRock Inc.
In its 30 years of operation BlackRock has become the world’s largest asset manager and is often described as the world’s leading shadow bank. The firm have enviable credentials and have for many years worked closely with regulators and government bodies, having been recruited by the US government to oversee the vast damage limitation exercise in the immediate aftermath of the 2008 financial collapse.
BlackRock are no noobs in the world of crypto either – their blockchain working group has been exploring the technology’s potential across a wide range of domains since 2015. The firm also has an unrivalled history of pioneering ETF products. Coinbase, for their part, are clearly uniquely placed in the nascent industry to work alongside regulators and negotiate an instrument which works for all parties.
There are few further details as yet, and certainly no timeline for an official proposal. BlackRock have firmly denied any wish to be issuers of a crypto fund per se, and Larry Fink has been vocal in his doubts about the sector. But today’s news suggests that crypto is still very much in the minds of the world’s biggest financial players. Increasingly it appears the question may be not so much if but when crypto will appear on retail investment markets. Markets failed to react, however, as combined market cap continued to hover over $200 billion.
