Financial giant BlackRock has applied for a spot-Bitcoin ETF, a move that has shocked the cryptocurrency community. This submission marks a sudden improvement during a time of increasing regulatory scrutiny in America.
BlackRock’s significant decision to select Coinbase as its custodial services provider adds an intriguing element to the story. It’s important to note that Coinbase is now defending against a complaint filed by the US SEC alleging violations of custody policies and various prices. Should the SEC approve BlackRock’s submission, it may most likely lead to a prompt resolution of the ongoing dispute.
Consultants in the crypto sector have provided their opinions on the subject. Notably, popular analyst Whale Wire offered an analysis of the situation and said that because Coinbase is not SEC-compliant, there is a high likelihood that the ETF application will be denied. They also emphasized the potential for ETFs to manipulate prices, indicating that this rejection may really be a good thing for buyers who are positive on the market.
Will Clemente, a different market analyst, thought the situation was rather funny. He recognized the contradiction in the fact that the SEC sued Coinbase despite having authorized its first public offering (IPO) in 2021. Questions are now raised as a result of BlackRock’s partnership with Coinbase as its custodial partner in the ongoing dispute. It’s important to note that Bitcoin has already been referred to by BlackRock as a “index of cash laundering.”
How will the SEC respond to the transfer of BlackRock?
Some market participants contend that if the SEC approves BlackRock’s application, it will represent a clear bias favoring larger players while driving out smaller ones. This stance increases the possibility that, if BlackRock’s application is accepted, Grayscale Investments, which has been actively pushing the conversion of the Grayscale Bitcoin Belief into a spot Bitcoin ETF, may take legal action against the securities regulator.