I have to say major financial institutions making a play for cryptocurrency trading just days after the SEC filed suit against both Binance and Coinbase. If it is not a coordinated attack then something at least smells extremely fishy. But let me tell you why.

Blackrock makes a play for crypto

In case you are not familiar with Blackrock, they are the biggest investment firm around. Managing trillions of dollars in a vast variety of assets and securities. There are a lot of fingers pointed at them, by I guess people like me, whenever they seem to make a move. Many think they have used their seemingly infinite resources to buy outright or leverage the people in power in order to get their way. I guess this is why the saying Blackrock wants, Blackrock gets exists.

Enough of the backstory, back to the action at hand. The SEC filed suits against Binance.US and then the day after against Coinbase. But for several things, among them operating without a license. And then in what can only be described as the mother of all coincidences Blackrock makes a filing with the SEC just days after again. We are talking about the dust having barely settled here. And what they applied for was a Bitcoin spot ETF license. And in the case that you happen to be financially illiterate like me. Let me tell you what that means.

ETF or Exchange-Traded Fund is a fund that can own securities or assets. It can own as many different types as it wants, in order to diversify. Or it can focus on a single one. In this case, where it is focused on Bitcoin and Bitcoin only. We then get to buy shares in the ETF, much like we could buy shares in any company. There are however a few things that make this different from how a company works. And that is the fact that the EFT can create and redeem shares based on the price of Bitcoin in this case. But also to reflect the demand, or lack thereof, for the EFT share. This means that the value of each share should stay close to the same at all times. And this is only the broad stroke version, for a more in-depth one I recommend DYOR.

If approved this means that Blackrock would enable people to buy and sell Bitcoin without buying and selling Bitcoin. To oversimplify things a bit. It will also mean that they become the first crypto ETF in the US. And by the looks of things currently people in the US are more or less unable to buy crypto on the big exchanges. If are they not lucky then they can buy the Blackrock Bitcoin ETF then and still partake in the crypto market.

Blackrock leads other follows

Just as it only took a few days for BlackRock to file with the SEC after the suits against Binance and Coinbase. It only took days for other banks and financial institutes to follow along the path staked out by Blackrock. Among them are Fidelity and Schwab in a joint effort, Citadel and yesterday DeucheBank were the last to "ape in".

Deutsche Bank, it is your turn to pick up after Garry

As an onlooker I have to say it very much looks like a coordinated attack och cryptocurrency led by Blackrock. And the first stage of the attack was sticking their attack dog Gary Gensler on the main competitors in the US. The large crypto trading platforms. And while everything is in full chaos attack two commences. Blackrock and its lackeys emerge as the savior. Look we are the knight in shining armor that comes to save the day. We also now bring forth with us your everyday crypto trading needs fulfilled.

Is it all bad tho?

I have to say sure there can be some good things. Like the odds of this type of action increasing the awareness of crypto and Bitcoin among the public is a good thing. And the fact that these large financial institutions have to buy a substantial amount of Bitcoin in order for them to make a large ETF is a good thing. These Bitcoins will be locked for a long time if this thing comes to fruition. And that will have a positive impact on price. 

The bad stuff I do however thinks, in the long run, outweighs the good. This will lead to some degree of increased awareness of crypto. But in large it will not spread crypto adoption. As these people now just can go buy an ETF share instead of learning how to use and buy the actual crypto. Also, this will remove trades from the crypto directly, potentially even decreasing their trade volumes. And while I am a far cry from an expert. Having a large trade volume is very beneficial for us who actually owns and use the crypto. As it means we can buy and sell it whenever we want. If you ever have owned or wanted to own stock in a smaller company you might have had the experience of having to wait for your buy or sell order to clear for a couple of days. And while an extreme. It potentially could happen to some crypto, at least the smaller ones.

I would like to end by saying that this whole scenario is eerily similar to the one I talked about in a previous post, about why the banks want to stop people from buying crypto. But there I play with another reason for doing so. If it sounds like an interesting read you can find it here.

What are your thoughts on this, am I just another doom and gloomer, or might there be something fishy going on here? As always share your thoughts in the comment section, I am looking forward to hearing about them.

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