Galaxy Digital CEO Mike Novogratz was among those who learned of the news, and others warned that it could be the start of a large institutional takeover.

Some crypto industry observers say BlackRock’s latest filing for a spot Bitcoin (BTC) trust will boost investor confidence in Bitcoin and could even be the “best thing that could happen” to BTC — but others warn of hidden costs.

In a June 16 interview, Galaxy Digital CEO Mike Novogratz said that BlackRock’s ETF application being approved would be “the best thing that could happen to BTC.”

“I say Hail Mary every night for Larry Fink and @blackrock launching a @bitcoin ETF,” Novogratz reportedly said during a Fox News segment.

Meanwhile, James Edwards, a cryptocurrency analyst at financial product comparison site Finder.com, told Cointelegraph that the timing of BlackRock’s filing should provide “confidence” for Bitcoin as an asset and for Coinbase’s upcoming legal battle with the SEC:

“BlackRock’s willingness to move forward with a Bitcoin ETF at a time when the SEC is against cryptocurrencies is very telling. It shows confidence in Bitcoin’s status as a commodity rather than a security,” he said, adding:

“It is unlikely that BlackRock would launch an ETF of this nature without serious consultation with regulators and confidence in the future legal status of Bitcoin.”

Edwards explained that BlackRock’s intention to use Coinbase Custody to control the funds should also be seen as a huge confidence booster for Coinbase as it prepares its legal defense. He added that if BlackRock, the world’s largest asset manager, did not have “confidence” in Coinbase’s legal position, they likely would not have worked with Coinbase.

Disadvantages

Others believe that the latest move by the traditional investment giant undermines the “ethos” of decentralized cryptocurrencies, or that the company may find a way to profit from retail investors.

Investor Scott Melker explained in a June 16 interview that such approval would be detrimental to the crypto-native innovators building the industry:

“While that might be good for institutions to adopt the space, it kind of goes against the ethos and kind of disingenuously distances itself from the people who built this industry in the U.S.”

Cinneamhain Ventures partner and Ethereum bull Adam Cochran believes BlackRock will make a big push into “discount tokens” for retail investors, a theory Melker agrees with.

Steven Lubka, managing director of Swan Bitcoin, holds a similar view, predicting that BTC will reach $1 million, but few retail investors will reap the rewards because the majority of BTC will be held by BlackRock, Goldman Sachs, and other ETF issuers.

Melker added that Wall Street firms will continue to enter the space and that U.S. regulators may “pick them” over existing platforms. Investment firms such as ARK Invest, Grayscale, Fidelity, Galaxy Digital, VanEck, Valkyrie Investments, NYDIG, SkyBridge and WisdomTree have applied to the SEC for similar Bitcoin and cryptocurrency ETFs.

Since the news was first reported, BTC’s price has risen 2.2% to $25,584 at the time of writing.

Interestingly, following the news of BlackRock’s filing, the Fear & Greed Crypto Index rose from 41 to 47 — out of the fear zone.