BlackRock joins institutional giants with new Blockchain ETF
With a new ETF launched by BlackRock, crypto assets are gaining momentum.
BlackRock, the world’s largest asset manager, is launching a blockchain exchange-traded fund (ETF) in Europe. The company seeks to offer similar benefits to ETFs launched in America to its European institutional clients.
New crypto ETF for European markets
BlackRock announced on September 29 its launch of the iShares Blockchain Technology UCITS ET, which will track the New York Stock Exchange’s FactSet Global Blockchain Technologies Capped Index.
The index is linked to 35 companies worldwide and listed on Euronext under the ticker $BLKC.
“We believe digital assets and blockchain technologies are going to become increasingly relevant to our customers as use cases evolve in scope, scale and complexity,” said Omar Moufti, BlackRock’s product strategist for thematic and sector ETFs.
The global asset manager appears to have a positive, determined stance on cryptocurrency. BlackRock has been quite proactive in getting involved in the crypto-fueled financial market revolution.
In early August, the company announced that it was partnering with Coinbase to offer bitcoin transactions to its institutional customers. In addition, it enables US institutional clients to invest in BTC through a newly launched private trust. Now BlackRock is setting up a blockchain ETF in Europe.
Exposure to blockchain and crypto companies is going to be provided by the iShares Blockchain Technology UCITS ETF in the near future.
It is expected that 75% of the index’s exposure will come from companies whose main business functions in a blockchain-related industry.
This includes cryptocurrency miners as well as exchanges. Companies contributing to the blockchain ecosystem account for approximately 25% of the index’s total exposure.
Looking up into the crypto space
Although before that BlackRock had a more pessimistic view of cryptocurrencies. In 2017, the CEO of the company, Larry Fink, referred to Bitcoin as an index of money laundering and a sign of operations related to money laundering.
This indicates that actions on the Bitcoin network and the price of Bitcoin have a strong correlation with the act of money laundering.
Yet BlackRock’s perspective has changed as a result of changes brought about by the demands of the market and its clients. As a firm focused on providing customers with long-term financial benefits,
BlackRock is betting on the possibility that the cryptocurrency market will experience significant growth in the long term.
Financial institutions advocate clear regulations
After a significant period of a bear market, October is an exciting month. Investors are holding out hope that it will lead to another positive change, specifically a bull run.
Recently, the chairman of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, proposed to ease the process of regulating bitcoin and other cryptocurrencies.
As long as the cryptocurrency market is subject to oversight, the director of the CFTC predicts that the price of bitcoin will continue to rise in the near future. Financial institutions will be encouraged to invest in cryptocurrency markets if clear regulations are implemented.
That’s the potential motivation behind the Senate Agriculture Committee’s decision to back the CFTC in its bid to become the first regulator of the bitcoin industry. Regardless, Behnam voted in favor of the law that would authorize it to impose fees on organizations that it regulates.
With crypto regulations in place, the CFTC, which will be the main regulator of crypto assets in the US, expects a more promising future. In the event that this action is taken, institutions will rush to buy Bitcoin, which will lead to an increase in the price of Bitcoin.
On the other hand, many investors are just sitting tight and waiting for the market to improve. According to the CFTC, this is an absolutely necessary condition. We can only hope that this forecast is correct.
