Asset management giant BlackRock’s recent application to launch a Bitcoin exchange-traded fund (ETF) has stirred a debate within the crypto community, with mixed reactions and concerns about the involvement of traditional financial giants in the industry.
The world’s largest asset manager’s move to enter the crypto space is seen by many as a significant validation for the industry, especially after a turbulent period of bankruptcies and scandals.
However, some in the crypto community have already started raising red flags about BlackRock’s potential entry into the space, pointing out that the traditional Wall Street giants are likely looking out for themselves and not crypto-native companies and users.
Is power over crypto shifting to traditional finance firms?
According to critics, BlackRock’s filing could be part of a broader power shift favoring traditional financial institutions in the crypto landscape.
Among those who have hinted at that is the popular Bitcoiner and venture investor Nic Carter, who suggested on Twitter that the SEC could have “guided” BlackRock to apply for an ETF “now that crypto-native firms have been de-fanged.”
This sentiment, which is shared by many in the community, was reinforced by the recent launch of EDX Markets, a crypto exchange backed by prominent Wall Street players, including Citadel Securities, Fidelity, and Charles Schwab, as well as renewed ETF filings from the likes of Valkyrie Funds.
As business news outlet Insider said in a recent article, BlackRock has long shown interest in the crypto space, and already has close to a dozen executives that are focused on the sector.
However, skeptics have expressed concerns about the potential compromise of core crypto principles such as privacy and decentralization, the article said, while noting that the involvement of major financial firms is viewed as a threat to crypto’s disruptive nature.
The same stance was also taken by the Insider article, which likened the entry of traditional financial institutions to crypto with “letting the fox in the hen house.”
“Contrary to what executives might say publicly, finance firms play for keeps. It’s not, ‘a rising tide lifts all boats.’ It’s, ‘burn the boats’,” Insider reminded readers.
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