BlackRock's entry into cryptocurrency marks the end of the idea of a decentralized world currency.
The arrival of BlackRock and other asset managers in the crypto space will bring Wall Street control to Bitcoin.
Bitcoin's rally in 2023 is driven by speculation and the potential approval of a spot ETF, but it does not indicate mainstream adoption.
Bitcoin USD (BTC-USD) has had a strong year with a gain of around 124% and crypto enthusiasts are cheering the impending arrival of BlackRock with spot exchange-traded funds (ETFs). Let’s look at the potential impact of the world’s largest asset manager in crypto.
BlackRock’s entry ends the decentralization issue
The reality of BlackRock’s entry into cryptocurrency is that it ends the idea of a decentralized world currency. In my opinion, BlackRock's filing of ETFs for Bitcoin, and now for Ethereum USD (ETH-USD), make it a certainty that the Securities and Exchange Commission will give their blessing to a spot market-based ETF. I also believe that anyone who thinks the SEC will decline a spot offering really doesn't see how the corridors of power in Wall Street work. Larry Fink's asset management behemoth has spotted an opportunity and I don't believe Mr. Main Street will be the ultimate winner.
First of all, if the Bitcoin enthusiasts are right about strong investor adoption then it simply means that the current whale-controlled speculative behavior in BTC gets handed over to Wall Street.
In BlackRock's SEC filing for the BTC ETF, it said:
"All shares in the ETF will be fully backed by BTC and no new shares can be issued without delivery of the corresponding value of tokens."
The more investors that buy shares in the spot ETF, the more BTC the asset manager needs to buy. Bitcoin fans then need to realize that if the cryptocurrency eventually meets their lofty price projections, Larry Fink's BlackRock OWNS Bitcoin.