Coinbase Explores Launching a Crypto ETF, Consults With BlackRock
Cryptocurrency-based exchange-traded funds (ETFs) have been long-awaited by the crypto community as a catalyst for incoming institutional capital. According to a report by Business Insider, Coinbase is seeking to launch a cryptocurrency ETF.
Coinbase Explores Crypto ETF
San Francisco-based startup Coinbase is exploring the launch of a cryptocurrency ETF and has sought advice from the world’s largest asset manager, BlackRock, reports Business Insider.
In recent weeks, Coinbase and BlackRock have been in conversations regarding the firm’s expertise in launching exchange-traded products. In 2015, BlackRock formed a blockchain working group to identify promising distributed ledger technology (DLT) ventures. Based in New York, it currently has over $6.28 trillion assets-under-management.
According to Business Insider, it is unknown whether BlackRock and Coinbase’s conversations were ongoing. A person familiar with the matter stated that BlackRock didn’t give any definite recommendations to Coinbase regarding the cryptocurrency ETF.
Similar to the Coinbase Index Fund launched in June, Coinbase’s cryptocurrency ETF would likely track several digital assets, rather than just Bitcoin.
It’s evident that regulators haven’t shown much support for a Bitcoin ETF, as several applications by numerous financial firms have already been rejected by the U.S. Securities and Exchange Commission (SEC).
Throughout this summer, the SEC denied 10 Bitcoin ETF proposals by Gemini, ProShares, Direxion and GraniteShares due to failure to prove that their investment products met all requirements of the Exchange Act. The VanEyck-CBOE Bitcoin ETF proposal is still under review until Sept. 30.
While Coinbase’s potential launch of a cryptocurrency ETF is still in its early stages, its conversations with BlackRock seem to indicate rising institutional investor interest in the nascent digital asset class.
Other Wall Street firms are also joining the movement and preparing new solutions for institutional cryptocurrency investors.
Goldman Sachs is developing a custody offering for digital assets, which means the firm would hold cryptocurrencies on behalf of funds and investors, providing a safeguard for client capital from hacking and cybertheft.
If enacted, Goldman Sachs would become the first major investment bank to back cryptocurrency funds–potentially drawing an influx of institutional capital to the sector.
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