Coinbase Exploring Cryptocurrency ETF As It Consults ETF Giant BlackRock
Leading US exchange Coinbase is exploring offering a crypto ETF according to a report claiming its been consulting BlackRock.
Coinbase has been making moves over the past few months that would see more institutional investors come into the cryptocurrency market. The cryptocurrency exchange is now said to be exploring Bitcoin ETF with the help of BlackRock.
BlackRock to aid Coinbase launch Bitcoin ETF
A report by Business Insider revealed that sources close to the cryptocurrency exchange stated that Coinbase has been working with BlackRock as they explore the option of a Bitcoin ETF.
Coinbase has reportedly talked with BlackRock’s blockchain working group. According to the report, the Bitcoin ETF being discussed is aimed at enabling retail investors to gain access to volatile crypto markets.
However, the report is unsure if the talks are just one time or if the duo had held several conversations over the issue and other related matters.
BlackRock is one of the biggest names when it comes to legacy market. The firm has become very popular with its focus on hedge funds and ETFs.
iShares, its most popular suite of ETFs, for instance, was responsible for $1.41 trillion of BlackRock’s assets under management in 2017.
The report added that the extensive knowledge of BlackRock on ETFs has been the center of the conversation between the two companies.
The sources, however, added that the working group didn’t give Coinbase any definitive direction on how it should go about getting a crypto-related ETF off the ground.
BlackRock forming its working group came as a surprise to many after Larry Fink, the firm’s CEO termed Bitcoin as an index for money laundering. Back then, he noted that the company’s clients have little to no interest in the surrounding crypto market.
Coinbase looking towards more institutional products
The San-Francisco based cryptocurrency exchange has been focused on rolling out institutional products as it aims to attract more institutional investors. Some of the products include custody and index fund services for accredited investors.
Before it can offer Bitcoin ETF, it would have to get approval from the U.S SEC. Coinbase wouldn’t be the only cryptocurrency company looking to offer it.
The Winklevoss twins, SolidX, and others have applied for Bitcoin ETF, with some of them rejected by the commission. SEC continues to complain that the markets aren’t mature enough or protected against manipulation to warrant an exchange-traded product.
Coinbase ETF is expected to be different from others as it looks to track multiple cryptocurrencies, not just bitcoin, one of the sources claimed.
The source added that the product and its price tracking would likely come from Coinbase’s own index of cryptocurrencies including Bitcoin, Ether, Litecoin, Ethereum Classic, and Bitcoin Cash.