Top US based crypto exchange Coinbase has announced its intention to create an ETF in partnership with BlackRock, a Wall Street Investment management firm.
This marks the second major US based crypto exchange to join the ETF race, with the putting forth their own application on behalf of Gemini. That application was denied twice, and now the market patiently waits for the results of the Bitwise, Direxion and CBOE ETFs.
Coinbase entry into the ETF game is intriguing, particularly because it comes after so many have ETFs already been rejected by the SEC on the basis of the crypto markets being too small and easily prone to price manipulations.
So far Coinbase has not revealed any information about how they plan to tackle these concerns, however, their partnership with BlackRock (a $6 trillion asset manager that 3 months ago set up a working group to look into cryptocurrencies and blockchain technology) signals an effort to get institutional players who understand the inner workings of the traditional finance system to help make a stronger case for a Bitcoin ETF.
Experts have claimed that one of the many reasons why the previous ETFs were denied was because of the people behind them, and the fact that they did not have direct relation to traditional asset management that already overseas ETFs for other assets like gold or real estate.
Starting with their strong emphasis on KYC/AML compliance, and the recent launch of their custodial service, Coinbase is slowly building a name for itself as the go to platform for institutional investors interested in crypto.
ETFs have become a pivotal topic for the crypto space in the second half of 2018. Many believe that the approval of just one ETF will be all that it takes to spring out of the current bear market into a bullish one. It remains to be seen what unique offering Coinbase will bring to the table with their ETF application, but the more leading crypto services – like Coinbase – try their hand in launching an ETF, the greater are chances are for achieving.