Business Insider revealed on September 5, 2018, that Coinbase for the last several weeks has been in talks with Wall Street investment giant BlackRock about establishing an Exchange Traded Fund (ETF) for crypto assets. A crypto ETF backed by the $6 trillion Wallstreet giant would make it much easier for mainstream investors to move into crypto.
Backed by Wall Street Giant
One of the obstacles for crypto to move into the mainstream is the complexities of trading it.
We are starting to see more and more fiat onramps where anyone can purchase Bitcoin (if their bank will let them), as well as Ethereum and the other major altcoins. But for anyone wanting to trade in most of the smaller cap projects, they have to learn how to move their coins between exchanges – a nerve wracking experience until you get used to it, often with half an hour or longer wait times, during which new traders usually can’t help but wonder if they made a mistake somewhere along the way.
Even for new traders who only want to hold one of the coins for which there are immediate fiat onramps, the sentiment is strong in crypto that you have to create your own wallet. This stuff is easy when you get used to it, but it really is an obstacle to adoption.
Your average middle aged investor is used to sitting down at the bank with someone in a suit who walks them through a few selected investment plans for them to choose between. They are not prepared to sit down and watch and rewatch a youtube tutorial on how to purchase a fraction of a Bitcoin and send it to Binance.
And the many players trying to build bridges between investors and crypto know this. The SEC’s decisions on Bitcoin ETFs are about exactly this; crypto giants trying to wrap volatile crypto assets into securities and make them available to trade like any other security.
Finally an ETF?
Coinbase may not be the first player to try to create an ETF for crypto, but they are persistent, and they are practical.
BlackRock has so far barely gotten its feet wet in Blockchain, with CEO Larry Fink going so far as to call cryptocurrencies a money laundering scheme. Nevertheless, BlackRock remains one of the oldest and largest players in ETFs, and Coinbase has sought the expertise of its Blockchain working group in creating a crypto ETF package that is likely to pass muster with the SEC.
It is unclear what has come out of these negotiations so far, but sources tell Business Insider that BlackRock has not, as yet, decided to enter into any long term collaborations with Coinbase.