Blackrock is reportedly set to debut its spot Bitcoin exchange-traded fund (ETF) with a monumental $2 billion in capital allocation on its very first day of launch. This extraordinary revelation comes courtesy of insiders, including Vaneck's Head of Digital Assets Research, Matthew Sigel, and Bloomberg ETF Analyst Eric Balchunas, who have independently verified the news with their respective sources.
The development aligns with Blackrock's ambitions to assert its dominance in the crypto ETF arena. The asset management giant, alongside Vaneck and several others, is awaiting the green light from the U.S. Securities and Exchange Commission (SEC) to roll out their spot Bitcoin ETFs. Sigel, during a recent discussion hosted by The Block, disclosed, "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."
However, it's important to note that Sigel exercised caution, stating, "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." Regardless of potential skepticism, Sigel's statements highlight the immense anticipation surrounding Blackrock's entrance into the Bitcoin ETF space.
For context, Vaneck's projections anticipated $2.5 billion of capital flowing into spot Bitcoin ETFs during the first quarter of trading. This estimate is derived by examining historical flows into the first gold ETF and adjusting for the U.S. money supply. According to Sigel, this analysis unveils a substantial $40 billion market opportunity over the course of two years.
Blackrock's strategic positioning began taking shape in December of the previous year when it filed an SEC plan to infuse its spot Bitcoin ETF with $10 million on January 3rd. This followed an earlier move in October, where the asset manager seeded its spot Bitcoin ETF with $100,000. The designated authorized participants for Blackrock's spot Bitcoin ETF include industry heavyweights Jane Street and JPMorgan.
Eric Balchunas, the Bloomberg ETF analyst, weighed in on Blackrock's formidable $2 billion debut, asserting, "It would be on brand for Blackrock. They've lined up and injected big cash into new ETFs on the first day of trading so it registers as volume/flows. *If* it's true, $2 billion would blow away all first-day/week volume/AUM records for an ETF." Balchunas further highlighted Blackrock's track record, with a majority of the "25 most successful ETF launches of all time" being dominated by the asset manager. He emphasized, "This is lined up cash (not organic), hence why I say 'on brand.' This is what they do." Importantly, Balchunas confirmed a second source supporting Sigel's claim of substantial capital reserves earmarked for day one.
Anticipation surrounding Blackrock's spot Bitcoin ETF is running high, with the expectation that the SEC will give the green light by Wednesday, coinciding with the regulator's decision on Cathie Wood's Ark Invest and 21shares' spot Bitcoin ETF proposals. The crypto investment landscape is poised for a significant shift as these developments unfold, with institutional investors eagerly awaiting their entry into the digital asset market through ETFs.
