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BlackRock's $1B Bitcoin Bet: 2.7% of Supply, $700K Price Target

Coin WorldTuesday, Jan 28, 2025 5:52 am ET

1min read

BlackRock, the world's largest asset manager, has been making significant strides in the Bitcoin market. According to data from blockchain analytics firm Arkham, BlackRock has purchased another $1 billion worth of Bitcoin in the past week, bringing its total holdings to 572,616 BTC, valued at $58.43 billion. This purchase represents 2.7% of the total Bitcoin supply, solidifying BlackRock's position as a major player in the cryptocurrency market.

BlackRock's CEO, Larry Fink, has expressed his belief in the potential of Bitcoin as a hedge against inflation and political uncertainty. During the World Economic Forum in Davos, Fink suggested that sovereign wealth funds could allocate a significant portion of their portfolios to Bitcoin, potentially driving its price to as high as $700,000 per BTC.

In a separate development, BlackRock has filed a proposed rule change with the US Securities and Exchange Commission (SEC) to allow in-kind creation and redemption for its iShares Bitcoin Trust (IBIT). This move aims to enhance the operating efficiency of the largest spot Bitcoin exchange-traded fund (ETF) by enabling institutional investors to trade shares of the Bitcoin trust for Bitcoins directly, rather than in cash. This in-kind model is expected to improve the performance of the ETF in the market and benefit institutional investors.

The filing leverages the recent approval of spot Bitcoin ETFs by the SEC, including IBIT, which currently offers a cash redemption model. Market advocates argue that the in-kind mechanism more accurately reflects Bitcoin's decentralized nature and has fewer intermediaries, resulting in smoother transactions. This development reflects the increasing demands of the Bitcoin ETF sector for more flexible arrangements and streamlined solutions.

BlackRock's filing is expected to influence other issuers of cryptocurrency ETFs to adopt in-kind redemption for their products. While BlackRock has not yet filed for an Ethereum ETF, this innovation reinforces its leadership in the fast-evolving crypto ETF market, where it continues to dominate in Bitcoin and other crypto-backed ETFs.

In a related move, the Cboe BZX Exchange has proposed a rule change to the SEC to allow in-kind creations and redemptions for the ARK 21Shares Bitcoin ETF (ARKB) and the

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