The crypto community has been in a frenzy in the last few days because several traditional financial institutions are deploying resources to the digital asset industry. These positive developments have pushed market sentiments to bullish, and the Bitcoin (BTC) price has quickly reached 30k from the 25k level. Let us look at the big names that are about to inject capital into the crypto space.
BlackRock Applies for Spot Bitcoin ETF
BlackRock, one of the biggest asset managers in the world, applied for a spot Bitcoin ETF. The new product will be called iShare Bitcoin Trust, and if approved would be the first spot Bitcoin ETF in the market.
BlackRock has approximately $10 trillion under management. According to Coinglass, there are less than 2 million available BTC in exchanges at the moment. If we do the math, it will only take less than $60 billion to scoop up all that liquidity. And sixty Billion is less than 1% of their assets under management.
The Securities and Exchange Commission (SEC) hasn’t approved any spot Bitcoin ETF, though it has given approval for several futures Bitcoin ETF. Grayscale is currently suing the SEC for denying its spot BTC ETF application
BlackRock is a juggernaut in the industry, and it would be interesting to see if the SEC tries to block their application.
EDX – A Crypto Exchange that is Backed by Titans
The SEC is currently waging a war with the two largest crypto exchanges in the world, namely Binance and Coinbase. These two exchanges are being sued for alleged regulatory infractions. Despite the FUD, a new crypto exchange, EDX Markets. was launched last June 20.
What makes EDX Markets unique is that it has the backing of well-known and respected financial institutions. Fidelity Digital Assets, Citadel Securities, and Charles Schwab are some of the titans supporting the new trading platform. These companies control trillions of dollars in assets. They only need to inject a small fraction of their assets into the crypto space to pump the market.
It is also interesting that EDX Markets will only list 4 digital assets, Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). BTC, LTC, and BCH are Proof-of-Work (PoW) assets and all three of them did not have any initial coin offering (ICO). It seems like EDX is trying to avoid the SEC’s ire by carefully curating which cryptocurrencies can be traded.
Deutsche Bank Applies for Digital Asset License
Deutsche Bank, one of the largest banks in Germany and Europe, has applied for a digital asset license from the country’s securities regulator, The Federal Financial Supervisory Authority (BaFin). The license would allow the bank to offer custody and other services for digital assets and cryptocurrencies.
The bank’s commercial banking head, David Lynne, announced the move at a conference on Tuesday, saying that the bank was building out its digital assets and custody business.
Deutsche Bank is a well-known financial institution in Europe and has over $1.3 trillion in assets. Its interest in the crypto space does not only bring capital but also recognition of crypto as a noteworthy asset class.
Valkyrie Expands Crypto Offerings with Spot BTC ETF
Valkyrie Funds, a crypto-focused asset manager based in Nashville, has filed an application with the U.S. Securities and Exchange Commission (SEC) for a spot Bitcoin exchange-traded fund (ETF). The fund is named the Valkyrie Bitcoin Fund. According to the prospectus, the “…objective of the Trust is for the Shares to reflect the performance of the value of a bitcoin as represented by the CME CF Bitcoin Reference Rate”. The shares are intended to be listed on the Nasdaq under the name “BRRR”.
Valkyrie is not new to the crypto space and has had an approved futures Bitcoin ETF since 2021. Its new application came right after BlackRock applied for its spot BTC ETF.
The company has over $1 Billion under management.
The Crypto Equivalent of a Gold Rush
Crypto was created to give users access to a secure, fast, and transparent form of money without the need for a centralized authority. Because of this, it has always been seen as a competition to traditional finance. However, crypto has survived despite all the FUD. Even Jerome Powell, Chairman of the Federal Reserve, acknowledged crypto’s “staying power as an asset class”.
The institutions that are supposed to be the competition of digital assets are realizing that crypto is an asset class that cannot be ignored. Instead of hampering its growth, they’ve realized that investing in it is a better idea. The biggest names in the industry are now deploying capital into the space. It is just a matter of time before others follow. Finally, the crypto gold rush is here.
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