BlackRock has a new definition for Bitcoin. Known for its conservative approach, BlackRock’s foray into the volatile and dynamic world of digital assets marks a significant shift in the traditional investment landscape. The company’s new perspective on Bitcoin not only underscores the growing acceptance of cryptocurrencies but also introduces a novel definition for BTC (Bitcoin) within the context of institutional investment strategies.
BlackRock has a new Bitcoin definition
As defined by BlackRock “Bitcoin is the first form of internet-native money to gain global adoption and the world’s largest cryptocurrency. Bitcoin transactions are sent using blockchain technology which allows it to be sent between any two parties without requiring a bank.”
The new definition by BlackRock comes on the back of Bitcoin ETF approvals by the United States SEC. A Bitcoin ETF is a financial product that exposes investors to Bitcoin price movements without holding the crypto coin. Bitcoin ETFs monitor the performance of Bitcoin as the underlying asset.
When investors buy Bitcoin ETFs, they are essentially purchasing shares or units in the fund that employ Bitcoin as its underlying asset. The ETF’s value is meant to track Bitcoin’s performance, providing investors with an alternate option of investing in Bitcoin without creating and maintaining a digital wallet or using crypto exchanges.
On January 10, 2024, the SEC approved BlackRock’s spot Bitcoin ETF, iShares Bitcoin Trust (IBIT), along with ten other ETFs. IBIT is intended to reduce barriers and operational problems by offering a direct channel for varied investors, including asset managers and financial advisers, to participate with BTC.
The ETF wants to use the custodian services provided by crypto exchange Coinbase. According to the formal filing, BlackRock plans to track Bitcoin prices using the CME CF Bitcoin Reference Rate, which collects data from reputable crypto exchanges throughout the world. Kraken’s subsidiary, CF Benchmarks, is in charge of acquiring pricing data.
According to BLK, the blockchain tech that hosts bitcoin allows it to offer global financial services. How? By sending payment regardless of location with no currency conversion needed. The entity has also acknowledges the scarcity of BTC with a supply fixed at 21 million bitcoin.
IBIT for BTC
The entity hails their BTC ETF to offer access that guarantees an ease of investing. Unlike direct investing in bitcoin, which requires setting up an account with a crypto exchange, you can buy IBIT in your existing brokerage accounts like any other ETF.
Secondly, the ETF is convent as it offers investors direct bitcoin exposure, without the operational burden. Per the financial behemoth “IBIT can help eliminate the logistical challenges, the potentially high trading costs and the tax reporting complexities of holding bitcoin directly.”
Thirdly, the sponsor fee sits at 0.25% and waived to 0.12% for 12 months up to $5bn in assets
Bitcoin’s market plan by Satoshi Nakamoto
As per Satoshi Nakamoto, Bitcoin is a decentralized digital currency created in 2009, using peer-to-peer technology for instant transactions. As per design, it operates without central control or oversight from banks or governments, relying on peer-to-peer software.
Bitcoin is considered a decentralized digital asset, distinct from traditional assets like cash or gold. Moreover, transactions are secured through cryptography and recorded on a public ledger called the blockchain.
As great as that sounds, since the BTC ETF approval, the crypto market has been under price correction. At the time of writing, Bitcoin is worth $39,816.11 today, down 0.4% from an hour ago and up 0.1% from yesterday. BTC’s value today is 4.0% lower than it was seven days ago. The total volume of Bitcoin exchanged over the last 24 hours was $18,239,250,902.
The global crypto market cap is now $1.62 trillion, up 0.05% in the last 24 hours and 51.37% from a year ago. As of today, Bitcoin’s market cap is $780 billion, reflecting a 48.03% dominance. Meanwhile, stablecoins’ market cap is $136 billion, accounting for 8.38% of the overall crypto market cap.
