Bitcoin (BTC) seems set for a strong year on the market amid multi-billion dollar inflows from new spot Bitcoin ETFs, yet, with highly charged price action fuelling aggressive volatility in the chart, new all-time highs are triggering big drops and institutional players like BlackRock are taking advantage.
On March 14, BTC mounted a significant upside move which saw a new all-time high established at $73,373, however, market reaction was swift – with a sell-off move into the weekend.
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Despite crashing in the short-time frame, big Wall Street players have remained committed to continued accumulation of spot BTC.
Bitcoin’s 5% recoil from $73,373 provided ample opportunity according to on-chain data shared by Lookonchain, the analytics firm revealed that amid the downtick, Blackrock (the world’s largest asset manager) bought more BTC for its clients.
BlackRock Buys $570M As Wall Street Keeps Accumulating Bitcoin
A close look at on-chain data shows that by the close of Thursday, BlackRock took advantage of the initial -5% price drop following the ATH to buy a staggering $570 million worth of Bitcoin for its spot Bitcoin exchange-traded fund (ETF) product – IBIT.
According to Lookonchain data, as of March 14, BlackRock accumulated a further 8,020 BTC and held 223,646 BTC worth over $15.9 billion.
On the other hand, Grayscale, a firm winding down its previous product, Grayscale Bitcoin Trust (GBTC), and converting it to an ETF, sold 1,122 BTC, now it currently holds 387,747 BTC worth over $27.5 billion.
Mar 14 Update:#Grayscale decreased 1,122 $BTC(-$79.82M) and currently holds 387,747 $BTC($27.58B).#Blackrock added 8,020 $BTC(+$570.55M) and currently holds 223,646 $BTC($15.9B).
9 ETFs(Including #Grayscale) added 12,828 $BTC(+$912.6M).https://t.co/3lAKG6bmO9 pic.twitter.com/2i59eql8V8
— Lookonchain (@lookonchain) March 14, 2024
BlackRock is leading other institutions, including Fidelity, in accumulating Bitcoin as the demand skyrockets – the influx of billions follows the approval of 11 spot Bitcoin exchange-traded funds (ETFs) in January 2024.
After years of rejecting the product, the United States Securities and Exchange Commission (SEC) gave the green light after endorsing the coin as a commodity similar to gold.
The strict agency effectively legitimized the asset, making it more appealing to risk-averse institutions, most of these institutions required a level of regulatory permission and comfort before gaining exposure.
A spot Bitcoin ETF, like IBIT, tracks the underlying price of BTC. It simplifies investment by allowing clients to purchase shares without storing the coins themselves. Instead, a custodian, such as Coinbase Custody, is tasked with ensuring the security of the coins.
This enables institutional money from entities such as US Pension Funds to onboard into Bitcoin to the tune of billions.
Will BTC Price Rally On Institutional Demand Ahead Of Halving?
The combined buying activity by BlackRock and other institutional investors suggests a strategic play ahead of the upcoming Bitcoin halving event.
This event, which happens approximately every four years, will see the network reduce rewards given to miners by 50% – this significant reduction in the daily issuance of new BTC could lead to a supply squeeze, lifting prices.
If the current level of institutional demand persists, the Bitcoin halving could act as a major price catalyst – with significant institutional demand meeting lower supply.
In that case, prices might rally beyond the $73,373 recorded on March 14.
As of March 15, Bitcoin remains under pressure – Coinlore data shows that BTC is down 8% on the last trading day but up 174% in the previous year of trading. However, even as prices fall, BTC is outperforming ETH, adding 5% versus the second most valuable coin in the past trading week.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
