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Trillion-dollar asset manager BlackRock has filed an amendment to its bitcoin spot ETF (exchange-traded fund) requiring Coinbase to process btc withdrawals for its fund within 12 hours amid growing concerns over the exchange’s on-chain settlement practices.
September 16th from BlackRock presentation It comes after concerns arose over how Coinbase custody ETF funds, with investors calling on the US cryptocurrency exchange to provide on-chain proof of the btc it has purchased on behalf of its btc spot ETF clients.
BlackRock's filing comes after growing investor concerns
BlackRock’s filing comes after investor concerns intensified last month after Coinbase revealed it was working on developing its own wrapped version of btc, called Coinbase Wrapped btc (CBBTC).
<img decoding="async" src="https://technicalterrence.com/wp-content/uploads/2024/09/BlackRock-demands-Coinbase-process-Bitcoin-ETF-withdrawals-within-12-hours.jpeg" alt="Coinbase and Robinhood shares fall despite bitcoin ETF approval”/>
Coinbase currently provides custody services for 10 of the 11 btc spot ETFs that launched this year in the US.
Despite these funds seeing substantial inflows throughout 2024, the leading cryptocurrency’s price movement has stagnated over the past 3 months. Investors have subsequently wondered why the surge in capital is not impacting the btc price.
Bloomberg ETF analyst Eric Balchunas also shared his take on why ETF inflows have not had much of an impact on btc’s price. In a Sept. 15 post on x, he attributed the minimal effect to selling activity from “native HODLers” who are offsetting purchases made by ETFs.
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I understand why these theories exist and people want to make ETFs the scapegoats, because it is too unthinkable that native HODLers could be the sellers, but they are. The call is coming from within the house. All ETFs and BlackRock have done is repeatedly save the btc price from the abyss.
— Eric Balchunas (@EricBalchunas) twitter.com/EricBalchunas/status/1835076543204540430?ref_src=twsrc%5Etfw”>September 14, 2024
Coinbase CEO Responds to Growing Concerns
Coinbase CEO Brian Armstrong partially responded to the concerns in a Sept. 14 post. x.com/brian_armstrong/status/1835022703570702490″>mail on x, saying that all ETF transactions are ultimately settled on-chain.
Regarding why the exchange hasn't released any on-chain proofs, he said he doubts the company's institutional clients “want people to dust off all their addresses.”
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