BlackRock, the world’s largest asset management company, aims to make transactions for the spot Bitcoin ETF faster and more transparent by making significant changes to its agreement with Coinbase.
12 Hour Period for Bitcoin Withdrawals
Bitcoin (BTC) from BlackRock, Coinbase Custody $63,547 requested that withdrawals be sent to the public Blockchain address within 12 hours of receiving instructions from iShares Bitcoin Trust ETF (IBIT) or its authorized representatives. This step was taken to ensure faster access to investors’ assets and more transparent transactions.
“Paper Bitcoin” Concerns
There have been some doubts in the crypto community about the transparency of Coinbase’s synthetic Bitcoin product, cbBTC. Some experts believe that cbBTC is a “paper Bitcoin” that is not fully backed by real Bitcoin and could lead to price manipulation. This is alarming for IBIT investors and the crypto market in general.
Cryptocurrency analysts warn that such synthetic products could disrupt the supply-demand dynamics in the market and negatively affect the real value of Bitcoin. It is stated that the risk of more “paper Bitcoin” being released into the market is increasing, especially with the popularity of institutional products and ETFs.
Statements from Coinbase and BlackRock
Bloomberg Senior Analyst Eric Balchunas noted that this update by BlackRock is a common practice for new products in the ETF industry. Balchunas stated that Coinbase is not speculating with funds and that BlackRock would react seriously in such a case. “All minting and burning transactions ultimately occur on-chain. For cbBTC, you need to trust a central custodian to hold the underlying BTC – we have never claimed otherwise,” Coinbase CEO Brian Armstrong said.
Armstrong also responded to concerns by emphasizing that the company conducts all transactions transparently and that they value user trust. Stating that trust and transparency are core values in the cryptocurrency market, Armstrong said they will stick to these principles.
BlackRock’s move ensures that the firm’s ETF is backed by quickly accessible Bitcoin, a move aimed at easing concerns about “paper Bitcoin” and boosting investor confidence.
The crypto community is closely following how these developments will affect the market. Experts emphasize the importance of transparency and real asset backing, stating that investors should be conscious of these issues.
With the proliferation of Bitcoin ETFs and other institutional products, it remains a matter of curiosity how the dynamics of the market will take shape. In this process, the steps taken and statements made by major players have the potential to directly affect the market.
The updated agreement between BlackRock and Coinbase raises expectations for transparency and trust in the cryptocurrency market. Such steps are thought to contribute to the establishment of standards in the industry.
Disclaimer: The information contained in this article does not contain investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
