Since the Bitcoin ETF was approved in the US in Jan 2024, institutions like Blackrock are buying a lot from the exchanges and why that matters.
BlackRock, the world's largest asset manager, is not buying all the Bitcoin ¹. Instead, it has launched a spot Bitcoin exchange-traded fund (ETF), which allows investors to gain exposure to Bitcoin's price movements without directly owning the cryptocurrency ². Here are some key points about BlackRock's Bitcoin ETF:
- *Increased adoption*: BlackRock's participation in the cryptocurrency industry through an ETF may attract more institutional and retail investors, increasing the legitimacy of Bitcoin as a form of investment ².
- *Liquidity and price impact*: The ETF may give investors a regulated and accessible way to get exposure to Bitcoin, increasing market liquidity and potentially affecting its price ².
- *Regulatory attention and investor protection*: BlackRock's submission and approval for a Bitcoin ETF draws regulatory attention, emphasizing the importance of clear rules and safety nets for the cryptocurrency sector ².
- *Market risk and volatility*: While a Bitcoin ETF may increase market liquidity and mainstream involvement, it may also raise market risk and volatility ².
