BlackRock, the world’s largest investment company, took the first step to create a spot ETF, BlackRock iShares, that would allow easy access to crypto for the company’s investors.
Following the news on June 15th, Coinbase shares ran up by more than 30%.
Companies’ representatives believe that this step is crucial since BlackRock iShares presents a new surveillance instrument that, as they hope, regulators will find useful.
Although Coinbase benefits from this deal in the short run, some experts say that this spirit may prove to be short-lived.
The main experts’ concern is that BlackRock filed their application while Coinbase is still dealing with an SEC lawsuit.
SEC has recently charged Coinbase and Binance for violation of registration requirements. According to some analysts, this may lead to the failure in ETF launching as it significantly threatens Coinbase functioning.
Coinbase, on the other hand, claims that it continues its work and is intended to defend itself in court.
Berenberg analyst Mark Palmer is confident that those investors who have decided to invest in Coinbase, should evaluate the possible profit as opposed to the risks of losses that may arise, for instance, from the halt of Coinbase’s staking service due to the SEC lawsuit.
An anonymous insider familiar with the case, on the other hand, claims that there is nothing to be worried about. The person says the Berenberg analysis does not consider the distribution of staking revenue across states.
Coinbase does its business across the United States, but the lawsuits came only from 10 states. This implies that even if cease-and-desist orders come from these ten states, Coinbase is still able to function in other jurisdictions.
If BlackRock receives SEC approval for a spot ETF, it will be a strong signal to other institutional investors and retail clients who want to profit from the price movement of the world’s most popular cryptocurrency.