Spot ETFs can Initiate a New Era of Crypto Investment: Coinbase & BlackRock

By: Eliza Bennet

Coinbase and BlackRock, two pivotal players in the cryptocurrency sector, have made their expectations clear regarding the potential benefits of spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs), respectively.

Coinbase, in its recent report, suggested that the approval of a BTC spot ETF would pave the way for a new fleet of 'compliance-friendly' financial products, providing increased access to diverse investor classes like registered investment advisers (RIAs), retirement funds, and institutions, by easing restrictions for them to invest and hold Bitcoin. The exchange believes that this could subsequently expand the crypto market, potentially injecting billions into it, with the expected rise in liquidity and price discovery for all market participants.

In contrast, BlackRock, the world's largest asset manager, has submitted a new spot Ethereum ETF filing to the U.S. Securities and Exchange Commission (SEC). If approved, the iShares Ethereum Trust, for which Coinbase is acting as the custodian, would allow regular investors to trade Ether as easily as stocks. This could subsequently promote broader investor inclusion, a more regulated market, and substantial growth in demand, besides ensuring improved security against the risk of losses through fraud and high premiums that can be a part of non-regulated investments.

Both Coinbase and BlackRock emphasized their belief that the approval of spot ETFs can significantly increase the mainstream accessibility of cryptocurrencies, particularly Bitcoin and Ethereum, thereby transforming the way crypto assets are bought, traded or exchanged, and offering a more viable alternative to the traditional financial systems.