As a seasoned researcher with a knack for deciphering market trends and understanding the intricacies of the financial world, I find myself awestruck by the meteoric rise of BlackRock in the Bitcoin realm. The sheer scale at which they’ve amassed their BTC holdings is nothing short of remarkable. It’s a testament to their foresight and strategic prowess that they’ve managed to outpace even industry giants like Grayscale.
Within just under nine months after the SEC’s approval of Bitcoin exchange-traded funds (ETFs), asset manager BlackRock swiftly emerged as the globe’s foremost Bitcoin fund in terms of size.
A Tale Of Two Titans In Bitcoin And Ethereum Holdings
As per data from blockchain analysis platform Arkham, investment giant BlackRock has been actively increasing its Bitcoin holdings via its ETF (IBIT) over the past few months.
Regardless of the sharp declines in Bitcoin’s price observed on August 5th and September 6th, which caused turbulence in the market, BlackRock has persisted in purchasing more Bitcoin. This action not only bolsters the token’s value but also strengthens its own investment portfolio.
By September 25th, BlackRock’s Bitcoin holdings amounted to roughly 358,000 BTC, which is equivalent to around $22.76 billion and represents approximately 1.70% of the total Bitcoin supply of 21 million.
BlackRock’s Bitcoin holdings are significantly larger than those of Grayscale, a prominent crypto asset manager, with a difference of approximately 98,000 Bitcoin. At present, Grayscale owns around 258,671 Bitcoin, which equates to a value of $16.45 billion. This underscores the substantial lead BlackRock has established in the Bitcoin investment sphere.
Grayscale currently has more Ethereum (ETH) under its management compared to BlackRock. According to Arkham’s data, Grayscale holds around 2.104 million ETH, which is equivalent to about $5.45 billion at the current price of $2,600 per ETH. On the other hand, BlackRock only manages approximately 349,970 ETH, or roughly $910 million worth.
BlackRock Strengthens Bitcoin Stance
BlackRock’s backing for Bitcoin goes beyond just financial investment; it also involves a firm endorsement of the underlying technology behind the cryptocurrency. In a recent conversation with Bloomberg, Robbie Mitchnick, who heads digital assets at BlackRock, disagreed with the widespread classification of Bitcoin as a “risk-on” asset.
In yesterday’s discussion, I pointed out an intriguing observation – Bitcoin appears to have a strong connection with the U.S. stock market as of late. However, it’s crucial to recognize that this perceived link could potentially be deceptive.
In times of positive market sentiment and robust economic expansion, the leader of BlackRock’s digital assets department pointed out that assets like stocks, commodities, and high-yield bonds often thrive. Alternatively, when there’s uncertainty in the market, assets such as gold become attractive because they offer a secure refuge for investors.
Mitchnick drew parallels between Bitcoin and gold, saying “gold shows a lot of the same patterns”, referring to their temporary correlations with equities. He emphasized that the long-term correlation between BTC and traditional financial assets is close to zero.
One key feature that sets Bitcoin apart is its decentralized structure, as noted by Mitchnick. Unlike traditional currencies, no specific nation or administration holds sway over it, making it an attractive prospect as a global monetary option outside of national control.
Mitchnick further emphasized the unique characteristics of Bitcoin, such as its limited supply, wide availability worldwide, and decentralized structure. He referred to it as a “non-government-controlled asset”. He noted that one key advantage of BTC is that it carries no country risk or counterparty risk, which makes it an attractive choice for investors aiming to broaden their investment portfolios.
As I’m typing this, Bitcoin, the largest cryptocurrency in circulation, has partially reversed its gains from Tuesday’s trading session following a one-month high of $64,700. At present, it is being traded at approximately $63,220, showing a minor decrease of 0.3% over the last 24 hours.
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2024-09-26 14:10