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Have Spot Bitcoin ETFs Changed the Digital-Asset Game?

January 26, 2024 | 1 minutes reading time | By John Hintze

The products approved by the SEC are “step one” in a revolution, says the CEO of BlackRock, an early leader in fund inflows. But many crypto-related political, risk and business-strategy issues remain unresolved.

In the week following the U.S. Securities and Exchange Commission’s January 10 vote to authorize 11 spot bitcoin exchange-traded funds, bitcoin funds led by BlackRock and Fidelity enjoyed upwards of $1.8 billion in total inflows. Does this apparently healthy, pent-up demand have bigger and broader implications for cryptocurrencies and their future commercial prospects?

CEO Larry Fink of BlackRock, whose iShares Bitcoin Trust surpassed $1 billion in the first four days of trading, declared in a CNBC interview: “ETFs are step one in the technological revolution in the financial markets. Step two is going to be the tokenization of every financial asset.”

That does not directly address or dismiss long-standing claims that bitcoin is the start of a money-and-payments revolution that will disrupt if not displace fiat currencies. The speculative risks of bitcoin investing have not gone away.

Yet tokenization of so-called real world assets is enticing to Fink and many of his peers in institutional finance, as an opportunity to remake asset management and a host of transaction types on a blockchain, or distributed ledger technology (DLT),...

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