BlackRock Secures 11,500 Bitcoin Amid Market Dip Following Spot Bitcoin ETF Launch
BlackRock, the world’s largest asset manager, has reportedly acquired a staggering 11,500 Bitcoin during the latest market dip following the launch of its spot Bitcoin Exchange-Traded Fund (ETF). This substantial purchase, equivalent to approximately 13 days’ worth of Bitcoin production, underscores the increasing institutional interest in the leading cryptocurrency.
BlackRock’s CEO, Larry Fink, recently revealed a significant shift in his perspective on Bitcoin, stating that he now views it as a “viable asset class.” This change in sentiment may have played a role in the asset manager’s decision to make such a substantial investment in the cryptocurrency.
The acquisition by BlackRock comes at a time when only 900 BTC are issued daily, highlighting the extraordinary nature of the purchase. The move effectively represents a single player absorbing nearly two weeks’ worth of Bitcoin production, emphasizing the asset manager’s confidence in the digital currency.
900 Bitcoin are issued daily, and you can see Blackrock’s move into their cash supply from last night into Bitcoin, buying the dip. Now, they mostly hold Bitcoin.
The key point is 11,500 BTC were sucked from the system in 2 days… pic.twitter.com/GzoEk2uMSl
— InvestAnswers (@invest_answers) January 13, 2024
Analysts have pointed out that the iShares Bitcoin Trust (IBIT) Spot ETF, which BlackRock manages, accounted for only about 25% of the trading volume over a two-day period. This implies that roughly 46,000 BTC were removed from the market during the same timeframe, with other players like Grayscale Bitcoin Trust (GBTC) also contributing to the substantial reduction in available supply.
If this trend persists, the Bitcoin market could be on the brink of a severe supply crunch. With an estimated 46,000 BTC absorbed in just two days, equating to approximately 23,000 BTC per day, this rate is approximately 25.5 times the daily production of Bitcoin. The overwhelming demand from U.S. ETFs, combined with additional interest from retail investors and global ETFs, suggests a tightening of available Bitcoin supply.
Despite the inherent volatility in Bitcoin’s price, the cryptocurrency has demonstrated resilience. The successful launch of the Bitcoin ETF, despite the high fees associated with products like GBTC, serves as a compelling indication of the growing institutional interest in the digital asset. This significant development could mark the beginning of a new era characterized by scarcity in the Bitcoin market, as institutional players increasingly recognize its value as a legitimate asset class.
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