If you are even remotely interested in the status of crypto UK, there is no way you would have missed to hear about crypto ETFs- or, more specifically, a Bitcoin BlackRock ETF in the past couple of months. If you are still wondering why suddenly everyone is interested in this BlackRock crypto ETF, and yet are hesitant to ask your pro trader friends, we are here to answer the question for you!
The UK has been taking a proactive approach in regulating its crypto sector, with crypto asset businesses in the United Kingdom now being required to abide by the Financial Action Task Force (FATF) Anti-Money Laundering and Counter-Terrorist Financing rules, or the Travel Rule. This regulation will be in effect starting September 1, making the UK one of the few countries to conform to the said FATF standards set in 2019.
As the crypto UK markets grow better regulated, where do crypto ETFs fit into all of this? We explore that too in this article, but for now, let’s start at the beginning, what even is a crypto ETF?
What is a Crypto ETF?
Source| What is a crypto ETF?
Before you learn about the newest BlackRock cryptocurrency foray, here’s the basic definition for you: a crypto ETF or exchange-traded fund tracks the value of an underlying crypto. When we talk about a spot Bitcoin BlackRock ETF, you are actually allowed to buy and sell it on a traditional stock market instead of signing up on a UK crypto exchange. Now, this is what makes a spot crypto ETF so revolutionary, and understandably the official approval for one of these crypto ETFs can lend legitimacy to the crypto sector itself.
You can think of crypto ETFs as a bridge between traditional finance and crypto, which may allow newcomers to the crypto UK space to comfortably trade in crypto on familiar grounds, instead of starting with a UK crypto exchange.
New in Crypto ETFs: What’s Happening with the BlackRock ETF?
BlackRock had applied for a Bitcoin spot ETF with the SEC (the US Securities and Exchange Commission) in June 2023 along with other firms like Fidelity. However, the heavy-handed SEC found it inadequate back then due to the lack of clarity about the management of a SSA or a surveillance-sharing agreement.
Following this, BlackRock named the US-based crypto exchange Coinbase to satisfy the surveillance-sharing clause and refiled its crypto ETF application. Now that Coinbase will be responsible for overseeing and reporting any possible illegal activity related to the BlackRock ETF, the application has been accepted for review by the SEC.
The latest in the BlackRock crypto ETF saga is that the SEC has delayed its verdict on the BlackRock ETF (and other crypto ETFs filed around that time) to early 2024.
Why Do People Care About the BlackRock Crypto ETF?
If you think about it, the hype surrounding crypto ETFs globally makes perfect sense. BlackRock is a big name in the investment sector around the world- enough to lend legitimacy to an asset class they base their products/services on. While the SEC has been against Bitcoin ETFs (or crypto ETFs generally) in the past, BlackRock has a 575-1 approval rate, which makes many hopeful about the BlackRock ETF in particular finally getting through to the SEC.
Case in point, firms like Invesco and WisdomTree have reapplied for spot crypto ETFs on BlackRock’s heel, even though they have been rejected by the SEC previously. Further, the SEC is said to be prepared to now allow crypto ETFs based on Ethereum futures as well: another big win for crypto enthusiasts throughout the world.
Indeed, the BlackRock ETF getting approval from the SEC is not something just the American crypto space is looking forward to; since the US has become the beating heart of global finance in this day and age, the whole world awaits the SEC’s decisions with bated breath.
Here’s how we can sum up the reasons to the BlackRock crypto ETF being a big deal:
- A Bitcoin spot ETF would bring easy access to BTC, so even mainstream investors can buy and sell it through a brokerage account.
- The inherent volatility of crypto is often misinterpreted as just a risk by newcomers, but a crypto ETF would show the traditional investors how it can in fact become a tool for profits to the right strategist.
- A green flag from the SEC for the BlackRock ETF would show the willingness of the SEC in protecting investors by regulating the crypto space, and allowing safe entrance for mainstream investors into the crypto trading markets.
Crypto ETF UK: the First Bitcoin ETF in Europe All Set to Launch
Crypto ETF UK: first Bitcoin ETF to launch in Europe
Now, you may be wondering about the status of crypto ETF UK. Before the BlackRock ETF news, all European exchange-traded products based upon digital assets had been presented as exchange traded notes. However, now the very first Bitcoin-based crypto ETF is about to be publicly listed.
The crypto ETF comes from Jacobi Asset Management, and it was originally set to be listed on Euronext Amsterdam in July 2022. However, the crypto winter of 2022 spurred on by the Terra-Luna death spiral and then the FTX fiasco didn’t actually present the right opportunity for it. But now Jacobi finally has the right time to launch their crypto ETF, and the BlackRock ETF is a major part of the reason for the broader market environment supporting this launch now.
Plan Your Crypto Portfolio
While the BlackRock crypto ETF is something we all eagerly await, it’s important to remember that crypto as an asset class has made it to the mainstream already within just over a decade of initiation, and that too despite much adversity. Even if the BlackRock ETF does not become a reality, the potential of crypto as a long-term investment is undeniable: which is why it’s important to focus on building your crypto portfolio today.
Notably, an ideal BlackRock crypto portfolio was outlined by some of their employees in the beginning of 2022. The paper recommends 84.9% BTC, 9.06% stocks, and 6.04% bonds for an ideal portfolio.
Now, as a beginner, we won’t ask you to go for that drastic percentage in BTC by the BlackRock crypto investments suggestions until you possess the conviction yourself of Bitcoin’s long-term potential.
But meanwhile, it’s a good idea to keep an eye on the current market news (and in turn, investor sentiment) as you take your first steps in the world of crypto. Coinbrit is here to help you with just that! Keep following us to learn about the biggest happenings in crypto, and frame your trading strategies accordingly!
Remember to research well for whichever cryptocurrencies you want to include in your portfolio before you onboard a UK crypto exchange. We wish you all the best in your endeavour!