A top executive at BlackRock has ruled out the launch of crypto exchange-traded funds (ETFs), citing liquidity concerns and an unclear regulatory framework — among some of the reasons why the world’s largest asset manager is holding back on ETFs.
Salim Ramji, BlackRock’s global head of iShares and index investments, said the $9.5 trillion global investment fund is in no hurry to launch cryptocurrency ETF’s, despite other asset managers scrambling for regulators’ approval of Bitcoin ETF’s.
Ramji, who also sits at the firm’s global executive committee, believes crypto ETFs are anything but troublesome. “I personally think crypto — things like stablecoins and certainly things like distributed ledger technologies — are a disruptive technology”.
“But I also think that before we wrap or put our brand on it, we want to be certain that clients are going to be happy with us five years from now, 10 years from now.”
SEC grants US investors access to a Bitcoin-linked fund
The US Securities and Exchange Commission (SEC) recently gave US investors access to a bitcoin-linked fund by approving a Bitcoin futures ETF from ProShares.
And thanks to the SEC’s approval — which is happening for the first time — ProShares raised a massive $1 billion in a record two days.
Second to receive approval from the SEC (and officially launched soon after) was the Valkyrie Bitcoin Strategy ETF, which has links to Bitcoin futures.
In the meantime, the SEC rejected VanEck’s application to launch a bitcoin spot price ETF.
BlackRock holds back on ETFs seeking more clarity
While other asset managers are launching crypto products or filing applications with the regulator, BlackRock is in no hurry of launching crypto ETF’s anytime soon. Ramji wants to buy time as he seeks to gain more clarity over ETF’s regulatory framework.
“The regulatory arena for cryptocurrencies is still incredibly opaque and not clear at all”.
He emphasized clarity, liquidity, and long-term markets as key prerequisites for the firm before it could dip its hands into crypto ETF’s.
“That is one example of one requirement among many, we would need to be clear about before launching into something. Liquidity is another, and the ability to make a good long term market”.
“The result of that means that we aren’t going to be the first in a given market. We don’t think the circumstances are right for it.”
Ramji’s comments come after Larry Fink, CEO of BlackRock, disclosed that “massive opportunities” abound for blockchain — a technology that supports Bitcoin.
