New York-based asset management giant BlackRock is reportedly preparing its war chest for the cryptocurrency industry, particularly lining up around $2 billion in capital for the eagerly awaited iShares Bitcoin Trust (IBIT), the firm's spot Bitcoin exchange-traded fund (ETF) that intends to offer regulated exposure to BTC for investors.
As the decision of the U.S. Securities and Exchange Commission (SEC) on the spot Bitcoin ETF applications of 13 hopeful issuers looms, BlackRock is believed to have laid out its plans and strategies for its crypto investment vehicle and, thus far, mobilized over $2 billion capital reserve, which is set to flow in the first week incrementally.
During last week's Spaces session on the social media platform X (formerly Twitter), VanEck's head of digital asset research Matthew Sigel shared that he heard about BlackRock's supposed plan from a "well-placed source."
"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 — I can't vouch for that. But you know, that's what everyone is doing, just making phone calls and trying to find the folks who can write checks for these products," he said.
Additionally, Sigel noted that if this information is accurate, it would blow away VanEck's estimate, which is around $2.5 billion in the first quarter of Bitcoin ETF trading.
The executive also explained that the firm's estimate is based on the past flows of the gold ETF and the U.S. money supply and disclosed that VanEck estimated a $40 billion trading volume target for two years.
"Our estimates — that, you know, if that $2 billion happened in week one, you know, that would blow away our estimates. We're at $2.5 billion in the first quarter of trading, which we do by looking at the past flows into the first gold ETF and adjusting by the U.S. money supply. And we have a $40 billion market opportunity over two years based on the similar analysis," Sigel said.
VanEck's Matthew Sigel just said he's heard from a well placed source that BlackRock has $2 billion of capital lined up from existing bitcoin holders that want to rotate into spot bitcoin ETFs in week one 👀 https://t.co/rP23TfO7iT
— Tim Copeland (@Timccopeland) January 5, 2024
The information from Sigel was later confirmed by Bloomberg Intelligence senior ETF analyst Eric Balchunas, who said, "I got a second source to confirm Matt's claim that they have big day one $ lined up."
Here’s the 25 most successful ETF launches of all time and you can see BlackRock dominates top 10. This is lined up cash (not organic) hence why I say “on brand” this is what they do. Further, I got a second source to confirm Matt’s claim that they have big day one $ lined up pic.twitter.com/bTta4I0GtH
— Eric Balchunas (@EricBalchunas) January 5, 2024
Bitcoin, the world's oldest and largest crypto asset by market capitalization, was trading in the green zone at $43,947.03 with a 24-hour trading volume down by 5.69% at $18,230,717,269 as of 12:58 p.m. ET on Sunday.
Bitcoin's latest price action represents a 0.12% spike in its value on the day and a 3.22% gain over the last seven days.
Data from CoinMarketCap shows that Bitcoin's current circulating supply stands at 19,592,256 BTC and its market cap is at $861,053,594,546.
