As SEC decision looms, $2 billion is predicted to flow into BlackRock Bitcoin ETF in WEEK ONE
BlackRock is rumoured to have an insane amount of capital inflow interest lined up for its spot Bitcoin ETF at launch, should it be approved by the SEC this week.
We are on the verge this week of the biggest change to hit Bitcoin and cryptocurrency in, like… the history of Bitcoin and cryptocurrency.
And no we’re not talking about the arrest of HyperVerse crypto-investing scheme promoter “Bitcoin Rodney”. (Didn’t know who that was, either, by the way. Don’t think it’s important.)
We’re of course referring instead to the impending likely approval of spot Bitcoin exchange traded funds (ETFs) in the US of Finkin’ A – by a mostly reluctant Gary Gensler and co of the US Securities and Exchange Commission (SEC).
Per the SEC’s own rules, a decision on this needs to be made this week – by January 10, which means some or all of these vehicles – gunned for by BlackRock, Fidelity, VanEck, Ark Invest, Invesco, Valkyrie and various other financial titans – could finally be up and running by some time on Thursday AEDT.
I think I speak for all of us… pic.twitter.com/oITGimN3XO
— Nate Geraci (@NateGeraci) January 7, 2024
Some observers tend to believe the US Bitcoin ETF approvals were pretty much rubber stamped the minute Larry Fink and BlackRock threw their hats in the ring.
The ETF was a done deal the day that Blackrock filed — They are basically an extension of the US govt.
Have thoroughly enjoyed learning about ETF filing intricacies through James and Eric though.
— Will (@WClementeIII) January 5, 2024
That tweet there refers to Bloomberg’s ETF analysts James Seyffart and Eric Balchunas, who have been 90% sure of the BTC ETF approvals for months, and just upped that belief to 95%.
Okay, so various pundits seem relatively sure this is a done deal…
— Anthony Scaramucci (@Scaramucci) January 4, 2024
And yes, we’re of course not discounting what would be a rugpull of epically sadistic proportions from SEC chief Gary Gensler if he were to deny, or even just further delay, these ETFs, especially after all the recent work done by his agency to meet with the various participants.
… So, assuming impending approvals are actually likely, what might happen next?
We’re definitely seeing some “buy the rumour” action on Bitcoin, even if the altcoins have cooled off as liquidity gets sucked over to the big orange one (that’d be BTC).
Bitcoin is trading around its highest levels in about 18 months, and just touched US$47k a short while ago as we tap keys.
So that part of the equation is in place. “Sell the news” with a face-planting dump is quite often the next part as the hype curtain is pulled back, revealing a reality that struggles to deliver anything tangible to match moon boi froth. The Wizard of Oz effect.
But what about buy the news? Is that a chance? Will this time be different? Whodahellknows at this point, really, but here’s something to cling to…
BlackRock, the world’s largest asset manager has reportedly lined up more than US$2 billion for its Bitcoin ETF for the first few days of the product’s trading.
This is according to a VanEck analyst – head of digital assets and research Matthew Sigel.
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
This would create a new record of day-one capital volume in the history of ETF launches.
VanEck itself expects about US$2.5 billion in volume in the first quarter of trading.
During an X Space discussion hosted by The Block on Friday, Sigel revealed:”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 caveated: “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 into these products.”
The VanEck man added: “If that $2 billion happened in week one, you know, that would blow away our estimates.”
And there are not one but 11 spot Bitcoin ETF filings all hoping to burst out the gates and become the fastest horse to win market share in the “Cointucky Derby”.
There’s no doubt BTC had a very good year in 2023, returning about 157% and surprising many after the disastrous 2022 for crypto.
Long-term investors of Bitcoin will know this, but Bitcoin’s outperformance of gold, other commodities, real estate, bonds, many/most equities is not an unusual occurrence. It’s been doing this for fun for years.
Predictions for Bitcoin vary – we’ve heard raging bull Cathie Wood talk about a $1.5 million BTC by 2030, and VC CoinFund is even predicting a US$500,000 BTC in 2024.
Most pundits’ estimates for 2024 are well below that figure, we should add. And indeed there are all kinds of predictions floating about the Cryptoverse, including 30%-40% dumps before the Bitcoin halving.
So, just buy Bitcoin in 2024? By no means should anything you read here, or indeed anywhere on crypto, be taken as anything remotely resembling financial advice… but… food for thought…
Bitcoin is rarely the fastest horse in the crypto race. Maybe initially, but certainly not when the market gets frothy.
A peak crypto bullrun in 2024/2025 even with the Bitcoin halving yet to arrive (sometime around mid-late April) may not bring the outsized gains you’re hoping for when you consider a crypto speccie portfolio investment.
If you’re willing to gamble in the crypto casino and are hoping to score 10x, 20x or more on ROI, it’s time to do some research and look further down the market cap list, and probably beyond the top 10.
Potential narratives for potential higher returns: RWA (real world assets) such as Maple Finance and Clearpool, gaming coins such as Illuvium and Shrapnel, layer 2 networks such as Arbitrum, Optimism, Polygon and Metis.
Bitcoin ecosystem plays such as Ordinals, the layer 2 Stacks, Tectum… these are coins that could potentially feed off some initial BTC ETF hype, in the very short term, however.
(Caveat, you could, of course, lose all your money investing into these areas. Crypto is risky as hell. Buyer beware etc. Right, that said… DYOR and knock yourself out.)