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⚡BlackRock's Bitcoin Holdings Soar🪁

Croxroad

15 Jan 2024 — 5 min read

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So, BlackRock's got this new Bitcoin exchange-traded fund (ETF), right? It's called the Ishares Bitcoin Trust, and guess what? Within just two days of trading on the Nasdaq stock exchange, they managed to snag a whopping 11,439 bitcoins, valued at almost $500 million. That's no small feat!

Now, this Ishares Bitcoin Trust is one of the lucky ones, given that the U.S. Securities and Exchange Commission (SEC) gave the green light to 11 spot Bitcoin ETFs this week. It seems BlackRock wasted no time diving into the crypto pool.

As of January 12, according to the Ishares ETFs’ website, their Bitcoin holdings stand at 11,439.2198 bitcoins, making up 99.99% of the trust holdings. That's a hefty investment. Interestingly, a crypto enthusiast noticed a quick move by BlackRock - on January 11, they had about 50% in Bitcoin and 50% in cash. But by the next day, boom, they were back to an all-in on Bitcoin strategy.

Now, the SEC gave the thumbs up, but Chairman Gary Gensler made it clear that it's not an endorsement of Bitcoin. He still cautioned about the risks. Some folks in the crypto world were a bit frustrated about the delay, with Commissioner Hester Peirce expressing that it felt like a missed opportunity after a decade of waiting.

Oh, by the way, the Bitcoin price went on a bit of a roller coaster - shot up to $49,000 on the first day of ETF trading but took a dip to below $42,000 on the second day. As of now, it's hanging around $42,885.90. The crypto world, always keeping us on our toes!

🎀 Bitcoin's Imminent Rise

In a recent statement, JAN3 CEO and well-known Bitcoin enthusiast Samson Mow has stirred up the crypto community with a bold prediction. Mow believes that a significant supply shock is looming for Bitcoin, and if things unfold as he anticipates, we might see Bitcoin's price skyrocket to a staggering $1 million within a remarkably short timeframe — potentially just 'days or weeks.'

Mow's forecast is anchored in what he perceives as a supply shock triggered by the surging demand from recently approved Bitcoin ETFs and ongoing market adjustments. The launch of these ETFs has already attracted billions in trading volume, with a notable example being BlackRock's acquisition of 11,500 BTC within the first two days of trading. This move alone has substantially reduced the available market supply, equivalent to buying 13 days' worth of Bitcoin supply at the current rate of around 900 BTC per day.

Experts suggest that if this aggressive rate of institutional buying persists, it could deplete the available Bitcoin supply in approximately 120 days, making Bitcoin scarcer than ever in its history. Adding to the complexity of the situation is the upcoming Bitcoin Halving, a historical event that slashes the rate at which new BTC are created, further contributing to a potential supply shortage.

Mow introduces the "Max Pain Theory" into the mix, a concept adapted from traditional financial markets. In the context of Bitcoin, this theory could lead to rapid and extreme price fluctuations, catching traders and investors off guard. Mow speculates on the possibility of a short squeeze, where those betting against Bitcoin (short sellers) are forced to buy back at higher prices to limit losses, amplifying the price surge.

While Mow's $1 million prediction may seem exciting, he also highlights the potential downsides and disruptions such a rapid rise could cause. This includes the impact on strategic plans of nation-states and companies, potential issues with the Lightning Network due to high fees, and challenges to models like Stock-to-Flow (S2F) used to predict Bitcoin's value.

Mow further speculates on the broader consequences, such as El Salvador missing the opportunity to issue Bitcoin bonds, major economists facing repercussions for not recognizing Bitcoin's rise, and implications for companies like MicroStrategy and influential figures like Michael Saylor.

In essence, Mow paints a picture of a potential seismic shift in the financial landscape, with Bitcoin reshaping established norms and catching many off guard if it reaches the $1 million mark in the rapid manner he envisions.

🅾️ Types of Crypto ETFs

So, you've got these things called single-asset crypto ETFs, right? They're like investment funds, but instead of a mix of different assets, they're all about one specific cryptocurrency, like Bitcoin or Ethereum. It's like putting all your eggs in one digital basket.

These ETFs are designed for folks who are all in on the potential success of a particular cryptocurrency. So, if you're a die-hard believer in the future of Bitcoin or Ethereum, these single-asset ETFs let you directly ride the waves of their price movements. It's a bit like saying, 'I'm putting my money on this one horse in the crypto race.'

It's a more focused approach compared to those mixed-bag ETFs. If you're confident that a specific digital currency is the next big thing, these single-asset ETFs give you a way to jump in with both feet and see how it goes. Just keep in mind, though, it's a bit of a high-risk, high-reward game, depending on how well that particular crypto does in the market.

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