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Hush, darling. Adults talk.
After the monumental collapse of FTX last year, it was clear that the crypto industry had to cut its hair, turn off the rock n' roll and grow up, that is, start operating under real regulations, even if Washington hasn't fully figured them out.
Perhaps BlackRock was the ever-needed parent crypto.
Play with the big kids
Cryptocurrencies emerged in 2009 with the launch of Bitcoin, and from there tens of thousands emerged, acting as digital wallets on decentralized networks And unregulated by governments - real disruptive banking stuff. A few even went on a killing spree, especially when the industry started to look more legit via legacy banks and expensive celebrity endorsements. In 2021, one Bitcoin was worth over $60,000. Absent meaningful industry oversight, crypto was always going to be risky (namely, one Bitcoin is now worth about half of what it was two years ago).
So far, the United States Securities and Exchange Commission has approved crypto ETFs based solely on bitcoin futures. These are listed on the Chicago Mercantile Exchange, a regulated venue. But he has yet to pull the trigger to endorse so-called spot ETFs, which would allow people to buy and trade Bitcoin directly like investing in stocks. The SEC has denied these types of applications for a decade, citing high potential for fraud and manipulation, and viewing most crypto-trading tokens as essentially unregulated securities. But a new challenger has emerged, someone who knows something about succeeding in a highly regulated financial world.
- BlackRock has become the largest asset manager in the world, with a portfolio recently valued at $8.6 trillion. It also has deep ties to world leaders, and in the United States it is sometimes referred to as the fourth branch of government. BlackRock has the clout, the legitimacy and the money behind it to perhaps influence the SEC where others have failed.
- In hopes of getting on the Nasdaq, BlackRock's iShares Bitcoin Trust includes a "monitoring sharing agreement". It's a real weed term, but it's essentially just a measure to enhance transparency on the exchange. Eric Balchunas, analyst at Bloomberg said BlackRock has a 50-50 chance of getting the green light because the SEC has approved 575 of its applications and denied just one. If successful, it could open the doors for more companies like Fidelity, WisdomTree and Invesco to get their cash ETFs approved as well.
“The BlackRock ETF will likely be approved,” said CoinRoutes CEO Dave Weisberger. Financial Times.
Back from the dead: FTX, the aforementioned crypto exchange that lost billions of dollars in just days thanks to founder Sam Bankman-Fried's terrible management and possible criminal activity, could be making a zombie-like comeback. According The Wall Street Journal, CEO John J. Ray III said the company “has begun the process of soliciting interested parties to restart the FTX.com exchange.” Ray has already told the WSJ that despite alleged fraud, customers and investors loved FTX's business model and were happy with the product. First it came for our wallets, just hope this time it won't be for our brains.