How BlackRock Is Opening Doors To Wall Street Banks For Indirect Asset Holdings
Portfolio Pulse from Khyathi Dalal
BlackRock (NYSE:BLK) has modified the structure of its proposed Spot Bitcoin ETF to allow Authorized Participants, primarily Wall Street banks, to create new shares with cash instead of only cryptocurrency. This change, following discussions with the U.S. SEC and Nasdaq, enables banks that cannot directly own crypto to participate as APs, potentially increasing liquidity for the ETF. CF Benchmarks CEO Sui Chung believes this could significantly enhance the ETF's liquidity due to the involvement of banks with large balance sheets.
December 12, 2023 | 9:56 pm
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POSITIVE IMPACT
BlackRock's proposed Spot Bitcoin ETF structure change to include cash creation of shares may attract more liquidity and participation from Wall Street banks, potentially increasing interest in the ETF.
The structural change to BlackRock's Spot Bitcoin ETF could be seen as a positive development, as it may lead to increased liquidity and wider participation from institutions that were previously unable to engage with cryptocurrency assets directly. This could result in a positive short-term impact on BlackRock's stock as the market may anticipate a successful ETF launch and increased asset management revenue.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The modification in BlackRock's Spot Bitcoin ETF to allow cash creation of shares by banks may lead to increased liquidity and potentially higher demand for Bitcoin.
While BTCUSD is not a stock or ETF, the news about BlackRock's ETF could indirectly impact Bitcoin's price. The ability for banks to use cash to create shares in the ETF could lead to increased buying pressure on Bitcoin as it would be needed to back the newly created ETF shares. This could potentially have a positive short-term impact on Bitcoin's price.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 70