In a move signaling a major shift in the cryptocurrency landscape, BlackRock, the world’s largest asset manager, has emerged as a dominant force in Bitcoin ownership through its iShares Bitcoin Trust (IBIT). Launched in mid-January 2024, IBIT has rapidly accumulated Bitcoin (BTC) holdings, surpassing not only established crypto exchanges but also major corporate investors.
Financial analysts are attributing this rapid growth to a surge in institutional investor confidence in Bitcoin as a viable asset class. Traditionally, investing in cryptocurrency has been a complex process for institutional investors, often involving navigating unregulated exchanges and securing private wallets.
BlackRock Edges OKX, Kraken In Bitcoin ETF Investments
ETFs, like IBIT, offer a more familiar and regulated framework, similar to investing in stocks or bonds. This accessibility is seen as a key driver behind the massive inflows into IBIT, which currently boasts over 243,130 BTC, according to crypto analyst Ali.
BlackRock’s #Bitcoin ETF launched in mid-January 2024 and now it holds more $BTC than OKX and Kraken combined, which launched in 2017 and 2011, respectively. pic.twitter.com/3cVtdaYa55
— Ali (@ali_charts) March 24, 2024
This figure eclipses the combined holdings of prominent crypto exchanges OKX (132,500 BTC) and Kraken (77,300 BTC), both of which have been operational for significantly longer. The shift suggests a potential power move, with traditional financial institutions like BlackRock taking the reins from crypto-native exchanges in managing Bitcoin assets.
BlackRock’s dominance extends beyond exchanges. IBIT’s holdings even surpass those of MicroStrategy, a well-known corporate advocate for Bitcoin, which currently holds an estimated 214,246 BTC. This unexpected development highlights the growing institutional appetite for Bitcoin and the potential for IBIT to influence the overall market.
Bitcoin market cap currently at $1.38 trillion. Chart: TradingView.com
Analysts like Ali point to a possible correlation between IBIT’s growth and rising Bitcoin prices. The recent surge in Bitcoin’s value, currently hovering around $66,948, could be fueled in part by the increasing demand for IBIT. Additionally, Ali suggests that a sustained break above $66,990 could trigger a further rise towards $72,880.
BlackRock’s ETF Could Surpass GBTC In Bitcoin Holdings
IBIT’s rapid growth also poses a challenge to Grayscale’s Bitcoin Trust (GBTC), the long-standing leader in Bitcoin ETFs. With average daily inflows of $274 million and an estimated 4,120 new Bitcoin entering IBIT every day, it’s projected to surpass GBTC’s holdings within the next three weeks. GBTC, conversely, has experienced outflows exceeding $277 million over the past two weeks.
GBTC outflows get a boost in the last seven days. Source: Farside Investors
While the future trajectory of Bitcoin prices remains speculative, BlackRock’s involvement undoubtedly signifies a new era for the cryptocurrency.
The world’s largest asset manager’s commitment to Bitcoin through IBIT lends legitimacy to the asset class and paves the way for further institutional investment. With its growing influence, BlackRock is poised to become a major player in shaping the future of Bitcoin and the broader cryptocurrency market.
Featured image from Pixabay, chart from TradingView