newsbtc.com
Financial circles are buzzing with the news that BlackRock, the world’s largest asset manager, is considering applying for a Bitcoin Exchange Traded Fund (ETF). This development signifies a substantial move by one of the most influential financial institutions into the world of cryptocurrencies.
The anticipation is growing amid revelations that BlackRock plans to use Coinbase Custody for the ETF, alongside the crypto exchange’s spot market data for pricing. This alliance represents a significant step in legitimizing cryptocurrencies in traditional finance.
Notably, Bitcoin (BTC) and Coinbase (COIN) have not reacted to the news but have only continued to dwell in red, with both assets down 3.9% and 2.81%, respectively, in the past 24 hours.
BlackRock’s Foray Into Crypto
The move marks a continuation of the collaboration that started last year when BlackRock partnered with Coinbase to offer crypto directly to institutional investors.
As of yet, the specifics about the nature of the ETF – whether it will be spot or futures – remain undisclosed. Notably, The Securities and Exchange Commission (SEC), responsible for regulating ETFs in the U.S., has previously turned down every application for a spot Bitcoin ETF.
However, several Bitcoin futures ETFs have gained the regulatory body’s approval for trading, indicating a gradually warming stance towards cryptocurrencies.
Potential Impact On Bitcoin Price
The news of BlackRock’s potential Bitcoin ETF could significantly affect BTC’s price. Creating such an ETF would allow a broader spectrum of investors to gain exposure to Bitcoin, possibly driving up demand and its price.
ETFs make it easy for institutional investors to gain exposure to Bitcoin, opening up a substantial new demand avenue. Analyst crypto Daan Crypto reported that Bitcoin had recorded a strong spot bid on Binance in the past few hours – a move that has not been seen for the past few days.
According to the trader, Bitcoin’s local bottom is more likely in if the asset continues to the downside in the coming days. At the time of writing, BTC currently trades at $24,977, down by nearly 4%. Its trading volume has also spiked over the past 7 days indicating massive trading activity.
Notably, from a technical perspective, BTC could still be prone to a continuous downtrend, given that the asset hasn’t hit major support, which can be found in the order block at $24,500.
Furthermore, the association with BlackRock, a globally recognized asset management name, could lend credibility and legitimacy to Bitcoin. This increased trust could lead to greater adoption rates and an upward price trajectory for Bitcoin in the long run.
As observed in the past, any positive development or news about BTC ETFs has often led to a spike in Bitcoin’s price due to increased demand from retail and institutional investors.
Featured image from iStock, Chart from TradingView