It was reported that Coinbase are in talks with the asset manager Blackrock to establish a cryptocurrency exchange traded fund (ETF).
Cryptocurrencies have been in the news a lot over the past 12 months, and many retail investors are keen to invest in these products. Given that they are non-traditional investments, more credibility is added to the industry when well established firms like Blackrock are associated with the instruments.
Blackrock are a major player in the ETF industry and that sector is growing rapidly as ETFs are a straight forward and cost effective way to invest in a basket of products. ETFs which track the performance of well-known stock market indices like the FTSE 100 are extremely popular.
Coinbase in conjunction with Blackrock are seeking to launch cryptocurrency ETFs, and this could be a straight forward, secure and relatively cheap way to invest in the underlying digital currencies. They may offer several different ETFs, where one could track the performance of a single market like Bitcoin, and another product could track a group of cryptocurrencies. Should the joint venture go ahead it could be a boon for the cryptocurrency industry as it would increase publicity, respectability, and funds to the sector.
It is worth noting that not every major finance house is keen to get involved in cryptocurrencies. Earlier this week, Goldman Sachs confirmed they are going to hold off on setting up a cryptocurrency trading desk as the regulatory situation remains unclear. This announcement sent bitcoin and ethereum lower as Goldman’s credibility was no longer connected to the cryptocurrency sector. Bitcoin has been in decline for months, and it is just over 6% above its 2018 low, while ethereum fell to a level not seen for nearly a year.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.