The Real Reason BlackRock Wants a Spot Bitcoin ETF
And it's not to make a point about the SEC's position on crypto.
On Thursday the unthinkable happened. BlackRock BLK 0.00%↑, the behemoth wealth management firm that controls over $9 trillion in assets, officially applied for a spot Bitcoin fund in the United States. This is significant for three reasons:
The SEC has denied every single application for a spot Bitcoin ETF to date from companies like Van Eck, WisdomTree, and Global X. We’re talking well over a dozen denials. The agency is actively litigating its anti-spot stance with Grayscale.
Elsewhere, the SEC has been targeting essentially every altcoin through enforcement actions against exchanges for months. Most recently suing Coinbase COIN 0.00%↑ and Binance.
BlackRock doesn’t lose applications. The company has applied for over 500 different funds with the SEC through the years. Just 1 hasn’t been approved.
So what the hell is going on here? Interestingly reaction from the bitcoiners has been mixed. Some say this is the best thing to happen to the space as it could bring in legitimate institutional demand. Others are a bit more fearful that this is a sneaky way to clip BTC’s wings by controlling it in the same way the banksters control the price of Gold and Silver.
I understand both sides. But believe it or not, I’m less enthusiastic on this for the space long term because I don’t think we can separate BlackRock’s ETF application from all of the SEC’s recent actions. In my view, the lens to view the ETF through depends entirely on what you actually want Bitcoin to be. If you want Bitcoin to be “Digital Gold” and simply benefit from ‘number go up’ as the dollar inflates away, this is great news. If you’re a self-custody maxi who wants BTC to actually be used as borderless settlement layer, this is probably less exciting. That’s especially true if you’re an advocate for the broader crypto space.
Because as I’ve laid out numerous times, Bitcoin isn’t actually all that great for peer to peer transactions. It’s slow, expensive, and terrible for personal privacy. Other coins and networks are actually much better in all of these areas and these are the kinds of coins that the SEC is coming after. Just in the last month, the SEC has deemed Polygon (MATIC), Solana (SOL), and Cardano (ADA) as unregistered securities through it’s lawsuit against Binance. 3 of the biggest alt coins in the market after Ethereum and Ripple.
As a result, we’re seeing firms like Robinhood HOOD 0.00%↑ and Bakkt BKKT 0.00%↑ delist those coins. For Bakkt specifically, this comes after the company delisted dozens of the other coins that were offered through its Apex Crypto subsidiary:
Bakkt, the new owner of a crypto custody and clearing provider that helps fintech companies like Public.com and Webull offer crypto trading, is removing support for 25 of the 36 tokens it offers, a spokesperson confirmed. The decision, which impacts popular tokens like uniswap and avalanche, marks the latest example of companies pulling back on crypto products in the U.S. as regulators closely scrutinize the industry.
This quote predates the SOL, ADA, and MATIC de-listings. Here’s what these actions actually look like for the consumer… This is all I can buy on Public.com now:
This is what the SEC’s regulation by enforcement is doing to the industry. I can buy Bitcoin, Ethereum, a couple meme coins, or legacy Proof of Work BTC forks. Not exactly exciting. Basically, Public.com’s crypto offerings now resemble CoinPot from back in the day. I think this is really bad for companies like Bakkt. Bakkt just finalized its purchase of Apex Crypto and is now delisting all of the coins the are offered through Apex Crypto. I doubt it ends well.
And this gets us to what I think is really happening. In a coordinated effort that includes the SEC, The Federal Reserve, and the FDIC, domestic demand for cryptocurrency is being intentionally throttled. This is really bad for companies like Bakkt and I doubt that company survives all this. If this playbook sounds familiar, it’s because it is.
This is damn near the same game the US Treasury Department and the Fed are running to wipe out the regional banking sector. Why wipe out the regionals? Because it pushes everything to the too big to fail banks. The same thing is happening with crypto. All of the little exchanges will be wiped out and you’ll need to buy your Bitcoin through BlackRock. Here’s the catch, you just can’t actually use it.
We don’t need more digital currency… we already have digital currency, it’s called the U.S. dollar. - Gary Gensler
Call me a conspiracy theorist but these are all of the moves you’d make before pushing through a CBDC - even if you call it something different. It’s a bit like the war against terrorism. It doesn’t take long for the tools to be used against the people in the country. The US knows it can’t control all of crypto globally. But it can certainly try to control you and me.
HSEP Update
Apologies, it’s been at least a couple of weeks since my last HSEP update. I could blame my in-laws being here but that would be a copout. Anyway, here’s what we’re looking at currently:
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