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According to a report released Thursday, Coinbase plans to develop a Bitcoin Exchange Traded Fund (ETF) in partnership with BlackRock, the global investment management firm based in New York. The proposed Bitcoin ETF would allow retail investors access to the cryptocurrency market.
"Coinbase has had talks with members of the BlackRock production line working group to leverage the company's expertise in launching publicly traded products," said Business Insider.
An ETF is a marketable security that follows either an index of funds, commodities or a basket of assets. A Bitcoin ETF would allow investors to buy Bitcoin through publicly traded funds. Like the Bitcoin futures that preceded it, a Bitcoin ETF is seen by many as the platform that will encourage institutional investors to turn to the cryptocurrency market.
In July, Financial News reported that BlackRock – which manages assets worth $ 6.3 trillion – had begun to discuss the possibility of investing in futures contracts and was exploring other ways of exposing investors. cryptocurrency and blockchain technology. In an interview with Reuters, BlackRock CEO Larry Fink said the company had set up a working group to explore Bitcoin and other cryptocurrencies. "We are a big blockchain student," said Fink.
The Securities and Exchange Commission (SEC) has already rejected a number of Bitcoin ETF proposals. The most notable are the fund proposed by Tyler and Cameron Winklevoss (founders of Gemini, a New York-based cryptocurrency exchange), ProShares following the Bitcoin futures and another by GraniteShares (a fully funded ETF). The reason for the rejection of the proposals was mentioned in the rejection document presented by the SEC under the title "Investor and Public Interest Protection".
In the "Analysis" section, the document stated: "The Commission recognizes that trading in a Bitcoin-based ETF on a national stock exchange with respect to dealing in unregulated Bitcoin spot markets may provide additional protection for investors.
The SEC has also expressed concern over fraud and manipulation in the Bitcoin markets. He said that NYSE Arca (the first fully electronic exchange in the US for ETFs and shares), which filed the ProShares application, had not met security requirements "in order to avoid acts and practices fraudulent evidence that Bitcoin futures markets are significant markets. "
Two separate Bitcoin ETF proposals – each by the VanEck fund management company and the SolidX cryptocurrency startup – are being reviewed by the SEC. If even one of them is approved, this could lead to a new cash injection of investors into Bitcoin. The interest of Coinbase and BlackRock in a Bitcoin ETF means that there may still be hope for the investment tool even though the SEC rejected the VanEck proposals and SolidX.
In early August, Coinbase also announced that the company would reduce the annual management fees of its index fund for all new and existing investors from 2% to 1% in order to attract investors familiar with index funds to low cost. This will help introduce a new category of institutional investors into the cryptocurrency space. "
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