Bitcoin, as well as other major cryptocurrencies, could be in line for a boost after reports bitcoin wallet provider and cryptocurrency exchange Coinbase is weighing whether to develop a bitcoin exchange-traded fund (ETF) in partnership with the world’s biggest asset manager, BlackRock.
The price of bitcoin and other cryptocurrencies took a dive this week after it was reported U.S. investment bank Goldman Sachs is shelving plans to set up a cryptocurrency trading desk — casting doubts over how much interest there is in bitcoin and cryptocurrency from Wall Street and institutional money.
Bitcoin’s price has been supported this year by the assumption that big banks and money managers were about to pile into cryptocurrency, though most firm’s plans — first hatched in the midst of bitcoin’s bull run last year — are still at an early stage.
The U.S. Security and Exchange Commission (SEC) is currently looking into whether to grant approval for a bitcoin ETF proposal from money management firm VanEck and crypto startup SolidX and could lead to a fresh injection of investor cash into bitcoin.
Coinbase’s interest in an ETF, first reported by Business Insider earlier today, could mean that bitcoin price support continues even if the SEC rejects the VanEck proposal — a decision that’s expected later this month, though has already been pushed back once.
Bitcoin and cryptocurrency speculators hope than a bitcoin ETF will mean retail investors are more easily able to buy into volatile crypto markets — without having to navigate clunky bitcoin exchanges.
Meanwhile, bitcoin traders are also looking ahead to November when the New York Stock Exchange’s parent company, Intercontinental Exchange (ICE), plans to roll out a bitcoin ETF through its cryptocurrency platform Bakkt, which is being launched in partnership with coffee chain Starbucks, software giant Microsoft, and Boston Consulting Group.
However, some influential voices in the bitcoin and cryptocurrency world have argued a bitcoin ETF will be bad for bitcoin and cryptocurrencies in the long term.
Last month Andreas Antonopoulos, a tech entrepreneur-turned bitcoin evangelist, warned that — although he does expect an ETF to be granted approval by the SEC eventually — it will not be a good thing for bitcoin or the wider cryptocurrency world.
“I’m going to burst your bubble,” Antonopoulos said. “I know a lot of people really want to see an ETF happen because ‘to the moon, and lambos,’ but I think it is a terrible idea. I still think it is going to happen, I just think it is a terrible idea. I’m actually against ETFs. I think a Bitcoin ETF is going to be damaging to the ecosystem.”
These bitcoin purists are much keener on news of bitcoin adoption, which many people think will still mean big price rises for bitcoin and other cryptocurrencies.