BlackRock, the world’s largest asset manager with over $9 trillion in assets under management, has filed two applications with the U.S. Securities and Exchange Commission (SEC) to launch exchange-traded funds (ETFs) that would invest in bitcoin futures contracts.
This move is significant for several reasons. First, it signals that BlackRock, which has been cautious about cryptocurrencies in the past, is now recognizing the potential of bitcoin as an alternative asset class that can offer diversification and hedging benefits to its clients. Second, it shows that BlackRock is confident that the SEC will approve bitcoin ETFs in the near future, despite the regulator’s repeated rejections of previous proposals. Third, it indicates that BlackRock is preparing to tap into the massive demand for bitcoin exposure among institutional and retail investors, which could unleash a wave of capital inflows into the crypto market.
According to a recent report by Ark Invest, a leading investment firm that focuses on disruptive innovation, bitcoin ETFs could unlock a $15 trillion crypto boom in the next decade. The report estimates that if 1% of the assets of companies, institutional investors, and central banks were allocated to bitcoin, its market capitalization would increase by $1.6 trillion. If 10% of those assets were allocated to bitcoin, its market cap would soar by $16 trillion.
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The report also argues that bitcoin ETFs would lower the barriers to entry for investors who want to gain exposure to bitcoin without having to deal with the technical challenges of buying and storing it directly. Bitcoin ETFs would offer investors convenience, liquidity, transparency, and regulatory oversight, making them more attractive than existing options such as trusts, funds, or futures.
BlackRock’s bitcoin ETF bid could be a game-changer for the crypto industry, as it would pave the way for other asset managers and financial institutions to follow suit. It would also increase the legitimacy and adoption of bitcoin as a mainstream asset that can compete with traditional safe havens such as gold or bonds. If BlackRock succeeds in launching its bitcoin ETFs, it could trigger a domino effect that would unleash a $15 trillion crypto boom in the next decade.
In a major blow to the crypto industry, Switzerland has frozen US$26 million in crypto assets held by Terraform Labs and its founder Do Kwon. The Swiss Financial Market Supervisory Authority (FINMA) announced on Monday that it had initiated enforcement proceedings against the company and its CEO for allegedly violating anti-money laundering regulations.
According to FINMA, Terraform Labs and Do Kwon failed to comply with the due diligence obligations for customer identification, transaction monitoring and reporting of suspicious activity. FINMA also accused them of providing false or misleading information to the regulator during its investigation.
Terraform Labs is the developer of Terra, a blockchain platform that supports various stablecoins pegged to different fiat currencies. Terra also powers Chai, a popular payment app in South Korea that claims to have over 2.5 million users. Do Kwon, a Korean American entrepreneur, is the co-founder and CEO of both Terraform Labs and Chai.
The freezing of the crypto assets is a provisional measure that aims to secure evidence and prevent dissipation of funds. FINMA said it will decide on the final disposition of the assets after concluding its enforcement proceedings. The regulator did not specify which crypto assets were frozen or where they were held.
Terraform Labs and Do Kwon have not yet issued any official response to FINMA’s announcement. However, in a tweet posted on Tuesday, Do Kwon said that he was “confident that this misunderstanding will be cleared up quickly” and that he was “fully cooperating with the Swiss authorities”. He also thanked the Terra community for their support and trust.