BlackRock, the leading asset manager in traditional finance, has highlighted potential risks associated with stablecoins for investors considering its proposed iShares Bitcoin Spot exchange traded fund (ETF).

Despite BlackRock’s significant involvement in the crypto industry, such as pursuing a Bitcoin spot ETF and registering an Ethereum trust, the company is now raising concerns about the impact of stablecoin price fluctuations on the ETF’s performance.

BlackRock is sounding the alarm

According to recent reports, the asset manager points to the potential instability of stablecoins such as Tether USD (USDT) and Circle USD (USDC), which are designed to maintain a value associated with a specific asset or currency, typically the US dollar. corresponds.

BlackRock emphasizes that past events have shown that these digital assets can experience significant price fluctuations, which in turn can impact the value of Bitcoin. The concerns stem from incidents involving Tether operators on February 17, 2021 and October 15, 2021, where legal action was taken based on false claims that their reserves were not fully backed by US dollars. As a result, Tether faced penalties and restrictions.

Additionally, USDC experienced a deviation from its $1.00 peg on March 10, 2023, when it was revealed that a portion of its reserves had been held at Silicon Valley Bank after the company was placed under receivership by the Federal Deposit Insurance Corporation (FDIC). This incident raised concerns about the stability and reliability of stablecoins. Blackrock explains:

Although the Trust does not invest in stablecoins, it may still be exposed to the risks that stablecoins pose to the Bitcoin market and other digital asset markets.

BlackRock concludes that indirect exposure to stablecoins could pose significant risks to investors in its Bitcoin ETF given the potential volatility, operational difficulties, possible manipulation practices and regulatory challenges associated with stablecoins.

BlackRock’s disclosure highlights the complex and evolving nature of risks in the cryptocurrency market and underscores the importance of investor awareness of the underlying assets of financial products tied to digital currencies.

Cathie Wood questions Gensler’s stance on the Bitcoin ETF

In a recent interview with CNBC, ARK Invest CEO Cathie Wood commented on the current status of Bitcoin ETF approvals from the US Securities and Exchange Commission (SEC).

Wood expressed confusion over SEC Chairman Gary Gensler’s stance on Bitcoin ETFs given his extensive knowledge of the digital currency, noting that he taught about BTC at the Massachusetts Institute of Technology (MIT).

Wood emphasized the decentralized and transparent nature of the Bitcoin network and emphasized that all activities can be closely tracked. She argued that these features made market manipulation highly unlikely.

Given the inherent transparency and accessibility of the Bitcoin ecosystem, Wood questioned the logical reasoning behind Gensler’s hesitation to approve a spot Bitcoin ETF.

To understand Gensler’s perspective, Wood speculated that Gensler’s interest in the Treasury Secretary position, which focuses on the stability of the US dollar, could influence his stance on Bitcoin ETFs.

Wood suggested that Gensler’s potential concerns about Bitcoin’s impact on the dollar could be a factor in his reluctance to approve the ETFs.

The SEC has received several applications for Bitcoin ETFs, but none have been approved so far. Market participants and investors have been eagerly awaiting the SEC’s decision as the launch of a Bitcoin ETF would allow for more accessible and regulated exposure to the cryptocurrency market.

BTC is currently losing $36,000 on the daily chart. Source: BTCUSDT on

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