BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
FOLLOW
BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
BlockNews.com
No Result
View All Result

BlackRock Spotlights Stablecoin Risks in Bitcoin ETF Proposal

BlockNews.com Team by BlockNews.com Team
November 14, 2023
in Business, Crypto, Featured
BlackRock Challenges SEC Over Inconsistent Crypto ETF Regulations

#image_title

Share on TwitterShare on Reddit
  • BlackRock, the world’s largest asset manager, flagged risks for investors in its proposed Bitcoin ETF due to incidents involving stablecoins like Tether and Circle deviating from their $1 peg.
  • Concerns stem from legal issues faced by Tether’s operators over false claims about reserves, resulting in penalties, as well as Circle’s reserves being partly held at a failed bank.
  • These events show stablecoins can experience volatility despite their intention to be stable, posing risks for Bitcoin ETF investors due to the interconnectedness of cryptocurrencies.

BlackRock, the world’s largest asset manager, has highlighted potential risks associated with stablecoins for investors in its proposed iShares Bitcoin ETF. The firm is currently waiting for the U.S. Securities and Exchange Commission’s (SEC) review of its ETF.

🚨 NEWS: BlackRock flags risks linked to stablecoins in its proposed iShares Bitcoin ETF filing.

Citing past legal issues with Tether and the recent USDC deviation from its dollar peg. pic.twitter.com/IE4s4SjBpk

— BlockNews.com (@blocknewsdotcom) November 14, 2023

What are Stablecoins?

Stablecoins like Tether (USDT) and Circle (USDC) are designed to maintain a value equivalent to a specific asset or currency, typically the U.S. dollar. However, BlackRock noted that despite their intended price stability, past events have shown that these digital assets can still experience significant price movements, which in turn can affect Bitcoin’s value.

Concerns Over Stablecoin Stability

The concerns stem from incidents involving Tether’s operators on February 17, 2021 and October 15, 2021. They faced legal actions due to false claims about their reserves not being fully backed by U.S. dollars. As a result of these legal issues, Tether was ordered to stop engaging with New Yorkers and incurred penalties totaling $61 million.

More recently, on March 10, 2023, USDC experienced a deviation from its $1 peg when Circle Internet Financial revealed that a portion of its reserves amounting to $3.3 billion had been held at Silicon Valley Bank after it went into FDIC receivership. This incident raised concerns about the stability and reliability of stablecoins.

Risks for Bitcoin ETF Investors

BlackRock has concluded that such indirect exposure to stablecoins could pose significant risks to investors in its Bitcoin ETF due to potential volatility, operational difficulties, possible manipulative practices, and regulatory challenges. The disclosure by BlackRock underscores the complexity and evolving nature of risks in the cryptocurrency market and highlights the need for investor awareness regarding the underlying assets of financial products tied to digital currencies.

Conclusion

BlackRock’s analysis of stablecoin risks shows that even assets designed to be stable can experience price fluctuations that impact cryptocurrencies like Bitcoin. This has implications for investors in Bitcoin ETFs and other crypto-linked products. As the crypto market matures, understanding these intricate connections and risk factors will be key.

Tags: BitcoinBitcoin ETFblackrockcryptoETF
Tweet1ShareShare1
BlockNews.com Team

BlockNews.com Team

The go-to news source for Cryptocurrency, Blockchain, Technology, & Finance

DON'T MISS THESE! HOT OFF THE PRESS

Web3 Companies Launch Major Grants to Fuel Crypto Market Growth
Breaking News

Web3 Firms Unveil Grants to Bolster Crypto Ecosystem Following Market Revival

December 7, 2023
Blockchain Technology Spearheads Climate Action at COP28
Breaking News

Blockchain Technology Spearheads Climate Action at COP28

December 7, 2023
Meta Leads the Fight Against AI Misuse with Invisible Image Watermarks
Breaking News

Meta Leads the Fight Against AI Misuse with Invisible Image Watermarks

December 7, 2023
Judge Approves Guilty Plea of Binance's Changpeng Zhao
Breaking News

Judge Approves Guilty Plea of Binance’s Changpeng Zhao

December 6, 2023
Google Announces New AI Model Gemini, Here is What you Need to Know
Breaking News

Google Announces New AI Model Gemini, Here is What you Need to Know

December 6, 2023
NeoTokyo The Crypto Gaming Hub
Breaking News

NeoTokyo: The Crypto Gaming Hub

December 6, 2023
Load More
Next Post
Coinbase Foresees Spot Bitcoin ETF Revolutionizing Crypto Investments

Coinbase Foresees Spot Bitcoin ETF Revolutionizing Crypto Investments

Animoca Brands Validates Chiliz Chain to Amplify Web3 Sports

Animoca Brands Validates Chiliz Chain to Amplify Web3 Sports

Bitcoin Eyes $47,000 by November Amidst 'Uptober' Momentum

Bitcoin Could Pump 400% Next Cycle and Here is Why

Related News

eurojust building

Takedown of Fraudulent Cryptocurrency Networks in Bulgaria, Cyprus, and Serbia

January 28, 2023
Binance-Website

Binance Redirects Belgian Crypto Users to Polish Arm Amid Regulatory Pressure

August 30, 2023

Ethereum Price Slides Below $1,900, Will The Shanghai And Capella Upgrade Propell ETH?

April 10, 2023

Browse by Category

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Featured
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized
Discord Twitter
BlockNews.com

BlockNews.com brings you the most important Crypto and NFT news in the space.

CATEGORIES

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Featured
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized

RECENT POSTS

  • Web3 Firms Unveil Grants to Bolster Crypto Ecosystem Following Market Revival December 7, 2023
  • Blockchain Technology Spearheads Climate Action at COP28 December 7, 2023
  • Meta Leads the Fight Against AI Misuse with Invisible Image Watermarks December 7, 2023

© 2022-2023 BlockNews.com - Crypto and NFT news website by JRNY Club.

No Result
View All Result
  • Home
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides

© 2022-2023 BlockNews.com - Crypto and NFT news website by JRNY Club.