BlackRock’s Bitcoin ETF ‘is the best thing to happen’ to BTC, or is it?

June 16, 2023 Coin Telegraph

Galaxy Digital CEO Mike Novogratz was among those over the moon with the news, others warn it could be the start of a major institutional takeover.

BlackRock’s latest filing for a spot Bitcoin (BTC) trust will drive investors’ confidence in Bitcoin and may even be “the best thing that could happen” to BTC, according to some crypto industry observers — but others warn of a hidden cost.

During an interview on June 16, Galaxy Digital CEO Mike Novogratz said the approval of BlackRock’s ETF application would be “the best thing that could happen to $BTC.”

“I say a Hail Mary every night that Larry Fink and @blackrock pull off a @bitcoin ETF," Novogratz reportedly said on a Fox News segment.

Fun being on @LizClaman show!! And yes, @BlackRock getting a $BTC ETF through would be the best thing that could happen to $BTC. https://t.co/2fFBeB9eyo
— Mike Novogratz (@novogratz) June 16, 2023

Meanwhile, cryptocurrency analyst James Edwards of Finder.com — a financial product comparison website — told Cointelegraph that the timing of BlackRock’s filing should provide “confidence” in both Bitcoin as an asset and also Coinbase in its upcoming legal battle fight with the SEC:

“BlackRock's willingness to press on with a Bitcoin ETF at a time when the SEC is on a warpath against crypto is very telling. It shows confidence in Bitcoin’s status as a commodity – rather than a security,” he said, adding:

“It’s unlikely that BlackRock would push forward with an ETF of this nature without serious consultation with regulators and confidence in Bitcoin's future legal status.”

BlackRock’s intention to use Coinbase Custody to control funds should also be seen as a massive confidence booster for Coinbase as it prepares its legal defense, Edwards explained.

He added that BlackRock — the world’s largest asset manager — likely wouldn’t partner with Coinbase had they not been “confident” in Coinbase’s legal position.

The downside

Others argue that the traditional investment giant's latest moves undermine the "ethos" of decentralized cryptocurrencies, or, that the company may find a way to profit from retail investors.

Investor Scott Melker explained in a June 16 interview that such an approval would be a disservice to crypto-native innovators who built the industry:

“As good as this may be for institutional adoption of the space, it kind of violates the ethos, it is a bit of a dishonest push away from the people who built the industry in the United States.”

Cinneamhain Ventures partner and Ethereum bull Adam Cochran believes that BlackRock will swoop in on the “discounted coins” of retail investors, a theory also shared by Melker.

Blackrock ETF… https://t.co/3g77QNdAun
— The Wolf Of All Streets (@scottmelker) June 15, 2023

Steven Lubka, a managing director at Swan Bitcoin shared a similar view, predicting that BTC will reach $1 million, but few retail investors will reap the rewards because the bulk of BTC will be owned by BlackRock, Goldman Sachs, and other ETF issuers.

Melker added that Wall Street firms will continue to move into the space and that U.S. regulators will likely “choose them” over incumbent platforms.

ARK Invest, Grayscale, Fidelity, Galaxy Digital, VanEck, Valkyrie Investments, NYDIG, SkyBridge and WisdomTree are among the other investment firms that have applied to the SEC for similar Bitcoin and cryptocurrency ETFs.

Since the news was first reported, the price of BTC has increased 2.2% to $25,584 at the time of writing.

Interestingly, the Fear & Greed Crypto Index increased from 41 to 47 — leaving the fear zone — following the news of BlackRock’s filing.

Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?

Cathie Wood’s ARK loads up crypto bags, buys $19.9M Block shares

June 9, 2023 Coin Telegraph

Cathie Wood’s ARK loads up crypto bags, buys .9M Block shares

Ark Invest

Just days after buying $21 million of Coinbase shares, ARK Invest CEO Cathie Wood has added another $19.9 million in Block Inc. shares across its ETFs.

ARK Invest CEO Cathie Wood doesn’t appear to have been swayed by recent crypto regulatory action, buying another $19.9 million shares of Block Inc. right after buying $21 million in Coinbase stock.

Wood’s latest buying spree comes despite the United States Securities and Exchange Commission this week suing two of the industry’s exchange heavyweights, Binance and Coinbase, for offering what the regulator considers to be unregistered securities, among other things.

Coinbase's share price has been depressed in the days following the SEC lawsuit, however, Block Inc.'s shares saw a sharp rise in that same time period.

ARK Invest’s 305,573 new shares of Block came across six buys between June 7-8, which now represents ARK’s fourth largest holding at 4.81%, according to ARK Invest Daily Trades.

Of the new shares, 240,174 were added to its ARK Innovation (ARKK) ETF, 39,099 shares to ARK Next Generation Internet (ARKW) and the remaining 26,300 shares to ARK Fintech Innovation (ARKF).

As for Coinbase, ARK Invest bought 419,324 shares — worth about $21.6 million — across three buys on June 6, which came in the midst of COIN plummeting nearly 20% overnight on June 5.

While many consider the lawsuits to have harmed the crypto firms, Wood recently told Bloomberg that the tougher charges laid against Binance may eventually work in Coinbase’s favor:

“We have Binance under increasing regulatory scrutiny for more criminal activities, fraud being one of them, therefore we have the competition for Coinbase disappearing, so that’s a good thing longer term for Coinbase.”

Coinbase is now ARK Invest’s seventh largest holding at 4.39%, with its total of 11,440 COIN shares spread across its ARKF, ARKK and ARKW ETFs, according to Cathie’s ARK, a website devoted to tracking her portfolio.

Since Q1, ARK Invest has increased the number of COIN shares by 8.2% — which comes on the back of 20.2% and 25.2% increases in Q4 2022 and Q1 this year, according to the website.

Because of regulatory uncertainty, innovation seems to be leaving the US for more friendly regimes. Unfortunate. I believe it will become an election-year issue. https://t.co/PvqK9W27Fd
— Cathie Wood (@CathieDWood) June 4, 2023

While Wood is becoming increasingly bullish on Coinbase, she believes the SEC’s regulation by enforcement approach has taken a toll on cryptocurrency innovators in the U.S.

The tech-savvy CEO is ultra bullish on Bitcoin (BTC) over the long term too.

In the Bloomberg interview, Wood explained that Bitcoin was built to thrive during times of market turbulence and regulatory uncertainty:

“Why would Bitcoin do well in that circumstance? It will do well because it’s an antidote to counterparty risk in the traditional financial system.”

In April 2022, Wood predicted that Bitcoin would reach $1 million by 2030.

Magazine: Hall of Flame: William Clemente III tips Bitcoin will hit six figures toward end of 2024

Cathie Wood’s Ark Invest Aggressively Buys Coinbase Stock After SEC Lawsuit Hits Price

June 7, 2023 The Daily Hodl

Investor Who Called End of Bear Market Doubles Down on Crypto, Says Industry Undervalued and Overlooked

May 31, 2023 The Daily Hodl

Cathie Wood’s ARK Invest Rapidly Accumulating Coinbase (COIN) Stock As Crypto Exchange Goes International

May 3, 2023 The Daily Hodl

Cathie Wood’s ARK Invest Accumulates More Coinbase Stock (COIN) As Crypto Exchange Goes Against SEC

April 26, 2023 The Daily Hodl

Third time’s the charm? ARK and 21Shares again file with SEC for Bitcoin ETF

April 26, 2023 Coin Telegraph

21 Shares

Cathie Wood’s ARK and crypto investment firm 21Shares are tripling down on their attempt to get approval to create a spot Bitcoin ETF in the U.S.

Cathie Wood’s ARK Invest and European crypto investment firm 21Shares are seemingly unperturbed by the cryptocurrency regulatory environment in the United States, again requesting approval for a Bitcoin (BTC)-based financial product.

On April 25, the two companies requested that the U.S. Securities and Exchange Commission (SEC) approve the creation of a spot Bitcoin exchange-traded fund (ETF) despite being rejected twice before.

The two companies first applied to create their spot Bitcoin ETF on June 28, 2021, which was later rejected by the SEC in April 2022. The regulator said the product did not meet the requirements of listing a financial product under its rules of practice as well as those of the Exchange Act.

The pair filed another request for a second time in May 2022, an application the SEC rejected again on Jan. 26 this year.

An ETF allows investors exposure to a particular asset without actually owning the underlying financial product. A spot Bitcoin ETF allows investors to gain indirect exposure to the cryptocurrency with shares that track BTC’s price in real-time without actually holding Bitcoin.

While the SEC has approved a number of Bitcoin Futures ETFs — that expose buyers to the potential future value of BTC — it has so far rejected every application for a spot Bitcoin ETF citing difficulties with “protecting investors and the public interest” against fraud and manipulation.

According to ETF analysts from Bloomberg, it seems likely that a spot Bitcoin ETF could become a reality in the U.S. midway through this year.

New note out on why we think spot bitcoin ETFs will get approved in early Summer 2023. The SEC is proposing to expand the definition of "exchange" which would bring crypto platforms under SEC reg. After that (which could take a year) look for ETFs to get green light via @JSeyff pic.twitter.com/TtFgFXrJ8h
— Eric Balchunas (@EricBalchunas) March 24, 2022

Crypto conglomerate Digital Currency Group (DCG) is currently seeking to convert its flagship Grayscale Bitcoin Investment Trust (GBTC) into a spot Bitcoin ETF and has sued the SEC for rejecting its proposal.

Grayscale chief legal officer Craig Salm said in a tweet on Jan. 12, “The case is moving swiftly. While timing is uncertain, oral arguments may be as soon as Q2 [2023].”

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