BlackRock, the world’s largest asset manager, has swiftly amassed nearly 11,500 bitcoins for its recently introduced spot bitcoin exchange-traded fund (ETF). The impact for the crypto market has been very positive.
Third-largest bitcoin stash among public companies
This bold manoeuvre places BlackRock in contention with the world’s foremost public bitcoin holders, effectively surpassing Tesla’s 9,270 bitcoin reserves and securing the third-largest bitcoin stash among publicly traded companies.BlackRock’s investment in crypto gained momentum just days after the introduction of the inaugural spot bitcoin ETFs in the United States.
The company’s treasury for this pioneering product now stands as a formidable force in the world of digital assets, positioning BlackRock to potentially outpace all other entities globally in bitcoin holdings.
Senior Bloomberg ETF analyst Eric Balchunas anticipates this transition, affirming that it is an eventuality.
Crucial distinction in strategy
One must note a significant divergence in approach between BlackRock and other prominent bitcoin holders like MicroStrategy. While entities such as MicroStrategy retain bitcoin as a treasury reserve asset, BlackRock utilizes bitcoin as the underlying asset for its ETF. The public iShares Bitcoin Trust holdings data on BlackRock’s website reveals the accumulation of 11,439.2198 “shares” of bitcoin, reflecting a market value of $497,994,992.41. Despite the substantial trading volume witnessed in the product’s early days, the spot price of bitcoin has exhibited relative stability.
Potential market impact
BlackRock’s rapid acquisition of 11,500 bitcoin during a recent market dip, assumes heightened significance considering that only 900 BTC are issued daily. Should this accumulation trend persist, the bitcoin market may encounter a notable supply crunch, exerting pressure on the cryptocurrency’s available inventory.
Shift in attitude
The strategic move towards crypto adoption by BlackRock marks a significant departure from the past stance of CEO Larry Fink, who had publicly expressed reservations about bitcoin. Following the listing of the firm’s spot ETF, Fink’s public commentary has taken a turn, with recent statements acknowledging bitcoin as an asset capable of safeguarding investors. BlackRock’s outreach extends to a commercial for its spot bitcoin ETF, tailored to resonate with the Baby Boomer generation.
Broader market context
Against the backdrop of the current crypto market conditions, where the bitcoin price hovers around $42,700, the approval and subsequent launch of spot bitcoin ETFs triggered immediate price gains. However, the market experienced a subsequent downturn post-launch. BlackRock’s strategic accumulation and bullish outlook on bitcoin further emphasize the transformative impact of institutional players in reshaping the cryptocurrency landscape.