Coinbase, the cryptocurrency exchange based in San Francisco, is exploring the creation of a fund traded with cryptocurrency (ETF). He sought help from $ 6 trillion of BlackRock asset manager, according to Business Insider .
Coinbase is known for its versatile business model that appeals to retail investors. Its services include asset management, risk capital, trading of 5 major currencies, custody and brokerage. According to sources, Coinbase is now trying to launch an exchange-traded product linked to encrypted prices, as a way to allow institutional investors to access the markets of cryptic volatiles through the stock exchange.
In the past few weeks Coinbase has engaged in conversations with individuals belonging to the BlackRock blockchain group in order to take advantage of the company's experience in launching exchange-traded products. A precursor to the ETF market, BlackRock is renowned for its popular family of low-cost iShares ETFs
BlackRock's interest in Crypto and Blockchain
BlackRock's blockchain group, created in 2015, attracts employees in its numerous divisions. The group's goal is to identify the technological applications related to blockchain in financial services.
It is unclear whether the talks were part of the ongoing conversations between Coinbase and BlackRock. BlackRock representatives refused to comment on developments.
Bitcoinist recently noted that BlackRock had no interest in becoming a cryptic fund issuer. Its CEO Larry Fink recently said that company customers have not expressed interest in the $ 300 billion market for digital currencies and cryptographic assets. He referred to Bitcoin as a "money laundering index". It seems that BlackRock will advise Coinbase in its ETF efforts.
Coinbase ETF faces many challenges
If Coinbase were to pursue the creation of a Crypto ETF, it would join several other companies wishing to launch their own, including Gemini, Bitwise Asset Management and VanEck. Several companies have seen their funding applications for ETFs rejected by the Securities and Exchange Commission (SEC).
Sources stated that the Coinbase ETF would probably have tracked a number of different currencies from Bitcoin (BTC) 0 0 . A Bitcoin ETF has been seen as the next step towards achieving legitimacy as an asset class and could lead to more institutional money being placed in cryptographic markets.
Coinbase's ETF should have faced the same issues of transparency and market manipulation that persuaded the SEC to break down 9 ETF proposals. However, Coinbase's conversations with BlackRock support the idea that Crypto's appeal is growing among the traditional Wall Street circles.
What do you think the impact of Coinbase's ETF exploration will be on the cryptocurrency industry? Let us know in the comments below!
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