The CEO of BlackRock Capital, the world’s largest investment fund, has predicted future innovation following the spot Bitcoin ETF approval by the US Securities and Exchange Commission (SEC) earlier this month.
Speaking to CNBC, Larry Fink shared his view that he believes there is value in launching ETFs for other crypto assets, including Ether, the second most widely owned and traded cryptocurrency after Bitcoin, built on the Ethereum blockchain.
Spot ETFs essentially function as a means for individuals to invest in Bitcoin via a pool managed by a fund, instead of directly purchasing the cryptocurrency outright. The SEC’s approval of Bitcoin ETFs has therefore opened the coin up to a much wider range of prospective investors.
In his appearance on CNBC’s Squawk Box programme, Fink remarked: “ETFs are step one in the technological revolution in the financial markets. Step two is going to be the tokenisation of every financial asset.”
The CEO added that he sees value in having a Ethereum ETF, repeating to the outlet that “these are just start stepping stones towards tokenisation”, a process which has already been adopted for a number of other popular investment assets.
In Fink’s view, the main benefit of tokenisation of securities is that the process minimises the risk of corruption, due to all investments forming part of a wider blockchain-based leger.
BlackRock has been one of the biggest advocates of cryptocurrency ETFs in recent years, with the firm having been very influential in the SEC’s decision to approve the investment option two weeks ago.
Along with fellow investment firm Grayscale, which specialises in management of digital currency assets, BlackRock had been actively calling for an ETF over the past several months.
In June 2023, New York-based BlackRock would file a request with the SEC for approval of the Bitcoin ETF. Seven months down the line, it would get its wish.
However, the SEC has not exactly been friendly to crypto in recent years, and its Chair, Gary Gensler, is particularly known for his stance against the assets and the surrounding market, describing it as the ‘wild west’.
In the SEC’s statement confirming the Bitcoin ETF approval, Gensler remained adamant that the move was not indicative of a wider liberalisation of the regulator’s crypto policies.
“It should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities,” he said at the time.
“Nor does the approval signal anything about the Commission’s views as to the status of other crypto assets under the federal securities laws or about the current state of non-compliance of certain crypto asset market participants with the federal securities laws.”
Nonetheless, the approval sparked excitement among crypto and investment circles, with Nick Jones, CEO and Founder of Zumo, remarking to Payment Expert that “crypto now has every chance to make good on its promises to democratise and update our financial system”.
The subject would later be discussed by Payment Expert on the iGaming Daily podcast, with PE’s editorial team discussing what the SEC approval means for the crypto market but also for other sectors.
