BlackRock and its actions ... $BLK+2.4%
Friends, let's have a little opinion on this company. We all probably know it, it's a giant amongst its own, and while we are mainly and only a stock portal, as an investor in this company, future moves to connect with the crypto world and ETF plans can and in my opinion will have a big impact on it.
In a strategic move that represents a significant step in the evolving cryptocurrency investment landscape, BlackRock's proposed exchange-traded fund (ETF) has taken a decisive step. The filing of the "IBIT" symbol in an amended S-1 filing with the Securities and Exchange Commission (SEC) on Monday underscores the company's intention to enter the growing cryptocurrency market.
This filing, was not a mere formality, but a major development that brought the integral mechanism of fund creation and redemption into focus. Significantly, the latest revision proposes a "cash return model" that analysts and industry experts have speculated about. "The Trust issues and redeems Baskets on an ongoing basis," as the document outlines the key operational process. The focus is on transactions that are primarily cash-based. However, there is interesting scope for an "in-kind" redemption process, subject to regulatory approval, a point that preserves a level of flexibility in the ETF's operational framework. BlackRock $BLK+2.4% 's apparent choice of a cash-based redemption model signals a good move in the context of ongoing considerations, potentially signaling an interim solution while leaving the door open for a "in-kind" redemption model. The difference between the two models - cash and in-kind - is based on portfolio management and the treatment of bitcoins. BlackRock, seeks flexibility in asset management within ETFs. However, the SEC appears to be leaning toward the former, the cash model, which requires the immediate sale of bitcoin holdings upon redemption request, a process that is seen as more in line with conventional business practices.
BlackRock, Inc.
BLKBlackRock's move to a cash redemption model before Christmas is seen as a proactive move to streamline operations, showing an intention to comply with regulatory preferences while leaving room for potential adjustments in the future.
How do you see this shift? 😊 I own the stock and am currently up a nice 26% or so and the company is still quite far from its highs. Personally, I see that as a plus. I'm a stock investor but cryptocurrencies are here and digital assets I believe will go forward. On the other hand, there are still a lot of unknowns and a lot of projects ending fatally so I hope they grasp it right and it doesn't hurt them in any way. 😊
BLK alone does not/will not have a big impact on BTC, along with it there are about 10 other funds interested in spot ETFs. They have a strong brand, but any reasonable person will go by TER, because there will be no other differences. Custody will be provided to them all by Coinbase, and the type of redemption given suggests to me that they want to withdraw as much "physical BTC" as possible from retail to limit its real use as money.
We have had futures for some time, even with pakha, so we only have a ring to create more derivatives to "artificially" inflate the limited amount of BTC issued into circulation.
Soon we may see an attempt to ban "unhosted crypto wallets" and, if it comes to it, excessive taxation, taxes on unrealized profits and similar monkeys.
These funds may help BTC to increase its legitimacy, but I think we could do without them, and in the end they may even damage the sector.
Well, it depends on how the SEC decides, which I think is pretty conservative, but I recognize that this move by BlackRock increases the likelihood of their ETF being approved. If that's the case, then Bitcoin would very likely rise sharply in 2024🤔 The problem I see is that it's probably already pretty much priced in, and otherwise there's a risk of a sharp decline. Well we are at a crossroads and it won't be clear until the end of January.