BlackRock, the New York-based asset management behemoth, is reportedly gearing up for a significant foray into the cryptocurrency market. The firm is said to be lining up approximately $2 billion in capital for the launch of its iShares Bitcoin Trust (IBIT), a spot Bitcoin exchange-traded fund (ETF) designed to offer regulated exposure to Bitcoin (BTC) for investors. This move comes as the cryptocurrency industry awaits the U.S. Securities and Exchange Commission's (SEC) impending decision on the spot Bitcoin ETF applications of 13 hopeful issuers.
During a recent Spaces session on the social media platform X (formerly Twitter), Matthew Sigel, VanEck's head of digital asset research, disclosed that he heard about BlackRock's strategy from a "well-placed source." Sigel indicated that BlackRock has reportedly mobilized over $2 billion in capital reserves, set to be incrementally infused in the first week following the ETF's launch. "I heard from a pretty well-placed source that BlackRock has more than $2 billion lined up in week one in new incremental flows from existing Bitcoin holders who are adding to positions," Sigel remarked.
If these reports hold true, the impact on the market could be substantial. Sigel noted that this influx would exceed VanEck's initial estimate of around $2.5 billion for the first quarter of Bitcoin ETF trading. These figures were derived by examining the past inflows into the first gold ETF and adjusting for the U.S. money supply, leading to a projected $40 billion trading volume over two years.
The assertions made by Sigel gained further credibility when Bloomberg Intelligence senior ETF analyst Eric Balchunas confirmed hearing similar information. Balchunas stated, "I got a second source to confirm Matt's claim that they have big day one $ lined up," adding another layer of anticipation for BlackRock's potential market impact.
As the crypto world watches with bated breath, Bitcoin's market performance remains robust. As of the latest data, Bitcoin was trading at $43,947.03, marking a 0.12% increase on the day and a 3.22% gain over the past week, despite a slight decrease in 24-hour trading volume. With a current circulating supply of 19,592,256 BTC, Bitcoin's market cap stands at an impressive $861,053,594,546.
The upcoming decision by the SEC on spot Bitcoin ETFs has the potential to reshape the landscape of cryptocurrency investments, and with giants like BlackRock poised to make substantial moves, the industry could be on the cusp of a transformative era. As the deadline approaches, all eyes are on the regulatory body and market movers like BlackRock, whose actions may signal the dawn of a new chapter in digital asset investment.
