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Read more: BlackRock-Backed Securitize Chooses Wormhole for Cross-Chain Tokenization
Eric Balchunas, a senior ETF analyst at Bloomberg, took to the X platform to talk about the issue, showing the operational diligence of BlackRock. He says that BlackRock runs its own blockchain node and checks Bitcoin balances from wallet addresses at Coinbase Prime every night.
The check is to make sure the Bitcoin reserves are at a level that it would maintain for the BlackRock Bitcoin ETF. While such data could be given access to institutional clients, BlackRock does not provide this level of detail publicly, to keep the spam level low-specifically, unsolicited transactions of sanctioned Bitcoin and NFTs.
Balchunas underscored BlackRock’s credibility: given the firm’s solid operational history of running more than 500 ETFs with custodians, it has gotten the nod from financial advisors coast to coast.
“This is not amateur hour,” he said, attempting to reassure investors that the operations behind BlackRock Bitcoin ETFs are sound and won’t end up as some form of disaster related to what happened with the implosion of FTX.
However, scepticism seems to mount over Coinbase’s cbBTC token. Investors criticized Coinbase’s user terms for its wrapped Bitcoin product, making it possible to trade the cryptocurrency between chains while keeping a 1:1 reserve of Bitcoin. The controversy kicked off when the community underlined a clause that said in case of a loss, Coinbase would only return a “proportional share” rather than full compensation.
The cbBTC launch comes amid unrest around BitGo’s Wrapped Bitcoin (WBTC) and its deal with the founder of Tron, Justin Sun. BitGo recently came out with a multi-jurisdictional agreement regarding asset custody as the developers continued to push for reducing Sun’s influence in the project.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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