The reason behind his emphasis lies in the different characteristics of futures and spot markets. Futures involve buying or selling an asset -- in this case, Bitcoin -- at a predetermined price at a specific future date. On the other hand, spot trading involves the immediate delivery, or"on the spot" exchange, of the asset.
As such, a Bitcoin ETF based on spot markets would entail BlackRock holding actual Bitcoin -- a move that would add considerable legitimacy and mainstream acceptance to the cryptocurrency. Notably, the U.S. Securities and Exchange Commission is yet to approve a physical Bitcoin ETF despite approving a futures-based one in late 2021.
BlackRock, with roughly $10 trillion in assets under management, has a complex relationship with cryptocurrencies. Earlier in 2023, CEOemphasized the potential of tokenization over Bitcoin in his annual letter to investors. In 2022, it launched an ETF tracking a basket of 41 blockchain-related companies, with Coinbase representing the largest share of the product's holdings. Despite this, BlackRock hasn't committed to a specific Bitcoin product.
In 2021, the asset management giant tested the waters by investing in Bitcoin futures, yet it hasn't embraced the leading cryptocurrency as many of its Wall Street counterparts have.
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