Bob Pisani On BlackRock's Bitcoin ETF: A Hidden Strategy?

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In a recent episode of CNBC’s “ETF Edge,” correspondent Bob Pisani led a discussion on BlackRock’s recent proposal for a spot Bitcoin ETF. This move has sparked intrigue within the financial community, given the U.S. SEC’s known reluctance to approve such an ETF under the leadership of Chairman Gary Gensler.

On 15 June 2023, The iShares unit of BlackRock, which is the world’s largest asset manager, filed paperwork with the U.S. Securities and Exchange Commission (SEC) for the formation of a spot Bitcoin ETF. This move came despite the SEC’s clear stance against a spot Bitcoin ETF. Pisani and the panel delved into the possible reasons behind BlackRock’s decision and its potential implications.

One of the key points raised during the discussion was BlackRock’s strategic partnerships. The company has teamed up with the Bank of New York Mellon and Coinbase for custody and has an agreement with NASDAQ for surveillance to enhance security. These partnerships could be seen as an attempt to demonstrate to the SEC that BlackRock is taking all necessary safety precautions to provide a secure investment environment.

However, the panel acknowledged the regulatory hurdles. Gensler has made it clear that the SEC will not approve a spot Bitcoin ETF unless the exchanges are regulated, which is currently not the case for Coinbase. Despite these challenges, the panel suggested that BlackRock’s move could be a game-changer if they can convince Coinbase to agree to regulation.

The potential impact of such a development could be significant. If institutional investors allocated just one percent to Coinbase, it could represent a substantial influx of money. The panel agreed that BlackRock’s move is worth watching closely, as the company would not have taken this step if they didn’t believe they had some chance of success.

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Pisani questioned whether BlackRock’s proposal could change Gensler’s mind without clear regulatory authority. The panel agreed that without a bill passing through Congress, Gensler has resorted to filing complaints in an attempt to regulate. Despite this, the panel did not see how this proposal could change the SEC’s stance.

The panel concluded the discussion by acknowledging BlackRock’s influence in the financial sector. When asked if they would bet against BlackRock, the panel agreed that they would not, highlighting the company’s significant presence in the industry.

Pisani concluded the segment by stating:

“We’re going to follow this very carefully, folks, because they’re not going to waste their time. Trust me, BlackRock isn’t if they don’t think there’s some chance of doing something here.”

This statement underscores the significance of BlackRock’s move. Despite the known regulatory challenges, Pisani suggests that BlackRock’s decision to propose a spot Bitcoin ETF indicates that the company sees potential for success in this endeavor.

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