In a pivotal moment for crypto, recent news that BlackRock and others such as Fidelity have filed for spot Bitcoin ETFs propelled BTC to a yearly high of just under $31,700. What does the arrival of these significant players mean for the future of crypto?
For years, the prospect of a Bitcoin ETF approval in the United States has been shrouded in uncertainty. However, the tides are turning this time, as the involvement of industry giants like BlackRock hints at a higher likelihood of approval.
Deniz, our CEO, echoes this sentiment, “Having always been a believer in the future of blockchain technology, seeing the progress that is being made on an institutional level reaffirms my beliefs. The likelihood that BlackRock will get approval for their spot Bitcoin ETF seems very high.”
He continues, “With Bitcoin being the largest and most secure cryptocurrency, it’s only natural for companies to take an interest in finding ways to leverage its value. This would be a good way for traditional investors to easily allocate parts of their portfolio to Bitcoin. The approval of a spot Bitcoin ETF could open the floodgates of investment.”
Though discussions continue about the type of Bitcoin underpinning these ETFs, the move would undoubtedly thrust cryptocurrencies into the spotlight for US investors. In many gold ETFs, for instance, it’s not actual gold that backs the ETFs but paper gold — a document that trades similarly to gold.
Once investors in the US become familiar with trusting Bitcoin and experience its returns, they will more than likely look to invest in other cryptocurrencies. That makes it much harder for the US authorities to maintain the narrative that crypto is a dangerous investment.
Although much of the focus is presently on the benefits of institutions taking crypto more seriously, some concerns loom. An inevitable shift towards institutional control may challenge the principles of self-custody and decentralization that underpin the cryptocurrency ethos.
Simon, our CTO, highlights this point, “I believe that having more big players in crypto can be a very good thing for the space, but we should remain cautious of the restrictions and limitations that could come along with it. We want to increase the adoption of cryptocurrency but also remain true to the decentralized, secure, and permissionless aspects that make blockchain technology so revolutionary.”
As US regulators strive to tighten the reins on the crypto industry, the evolving landscape will continue to prove challenging. With the SEC presently seeking to change the definition of an exchange so that they can target DEXs, it seems inevitable that other battles will lie ahead.
As the space adapts to the new environment desired by institutions, there will be more demand for products that fit their needs. Foreseeing this eventual institutional adoption, we began working on Paribus Pro many months ago. It’s designed to cater to institutional adoption while preserving the core values of the crypto space.
As Wilson, our COO, explains, “It’s really encouraging to see the signs of adoption from institutional investors. This will undoubtedly give further credibility to the creation of Paribus Pro. We will continue developing this version of our platform and keep up to date on the developments within the industry.”
He adds, “We’re grateful to have had the foresight to have been working on and planning Paribus Pro for some time now. This way, we can take advantage of the potentially favorable environment that we believe is coming.”
With BlackRock and other institutions having submitted their ETF applications, the countdown has begun on the 45-day approval window. While the SEC retains the option to extend this period, the market has already factored in the possibility of BlackRock’s success, making any potential delays or hurdles more impactful.
Despite short-term volatility, the overarching trajectory points to the gradual mainstreaming of cryptocurrencies over the next few months and years. Amid the pains of bear markets, these developments mark an exhilarating period for crypto, offering a light at the end of the tunnel.