In the world of traditional finance, or “TradFi,” a significant shift is underway. Major players are increasingly creating Bitcoin investment vehicles, a move that may seem counterintuitive given the recent legal actions against cryptocurrency giants like Coinbase and Binance.
However, the answer to this conundrum is simple: these TradFi institutions anticipate that enforcement actions will soon remove most of the barriers to creating a Bitcoin Exchange-Traded Fund (ETF).
In the past 48 hours, financial powerhouses such as BlackRock, Citadel, Fidelity, Charles Schwab, WisdomTree Funds, and Invesco US have all taken a leap into the crypto space. This move comes just seven days after the Securities and Exchange Commission (SEC) filed lawsuits against Coinbase and Binance, a development that has left many observers intrigued.
The SEC has consistently rejected previous Bitcoin ETF applications, citing two main categories of concerns. The first involves potential problems with the Bitcoin network itself, while the second, and arguably more pressing issue, revolves around fraud and market manipulation affecting Bitcoin’s price.
The SEC has been particularly vocal about the latter, asserting that Binance, the largest exchange in the crypto world, is engaged in these illicit practices. As long as entities like Binance exert significant control over Bitcoin prices, the approval of a Bitcoin ETF remains unlikely.
Adding to the complexity of the situation is the role of Tether, a stablecoin that the SEC specifically mentions as being used to manipulate Bitcoin. It appears that for a Bitcoin ETF to gain approval, both Tether and Binance must be removed from the equation.
With criminal investigations into both firms currently underway, the future of these crypto giants hangs in the balance. The question then arises: do these traditional finance firms have insider knowledge, or are they simply using public information to conclude that these entities are on the brink of collapse, thereby paving the way for a Bitcoin ETF?
Regardless of the answer, it’s clear that industry leaders like Larry Fink believe that the barriers to a Bitcoin ETF are about to be dismantled. If these barriers are indeed Binance and Tether, the crypto world may be on the cusp of significant change. As the situation unfolds, all we can say is: good luck!
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