In the cryptocurrency world, when big players like BlackRock venture into Bitcoin, questions arise. What’s their intent? Are they looking to control, manipulate, or harm Bitcoin?
We know you have similar questions like these. We, at Coinpedia, seek to answer them. Read on.
Larry Fink, the head of BlackRock, and the Bitcoin community both want the same thing: to see Bitcoin widely accepted as a store of value and potentially a medium of exchange.
As Bitcoin enthusiasts, our goal is simple: we want Bitcoin to keep growing as a reliable store of value and, eventually, become a medium of exchange.
On the other hand, BlackRock has a singular goal, i.e. making profits. They are primarily an asset management firm, which means they profit by expanding their assets under management (AUM). It’s quite straightforward; the more Bitcoin they hold in their ETF, the more they collect in fees.
Interestingly, BlackRock’s financial goals align with our interests. They have a strong reason to promote Bitcoin awareness and adoption. BlackRock is preparing to educate clients about Bitcoin, aiming to attract hundreds of billions of dollars into their spot ETF.
Their analysts predict that existing clients will invest $200 billion in Bitcoin ETF over the first three years. Assuming they reach this goal and charge a 60 basis point fee, they could earn a significant $1.2 billion in annual fees.
Given BlackRock’s revenue multiple of 5.5x, this could boost their market capitalization by a substantial $6.6 billion. This is remarkable, especially for a single product among their many ETFs, considering their $97 billion market cap.
Larry understands that Bitcoin offers more growth potential than any other asset in their ETF family. If Bitcoin experiences a 20x increase in value over the next decade, its Assets Under Management (AUM) could soar to $4 trillion, mainly due to this single product.
Consequently, fees generated from iBTC alone could reach an astonishing $24 billion annually, pushing their market capitalization up by an additional $132 billion. (This scenario assumes only 2% of BlackRock’s current AUM goes into iBTC.)
Read More: Is BlackRock Secretly Influencing Bitcoin Price? Here’s the Truth.
Larry Fink Isn’t Done Yet
Yet, Larry Fink has even more ambitious goals. He knows that Bitcoin offers unparalleled potential. If Bitcoin’s value substantially increases over the next decade, their AUM, fees, and market capitalization could all grow exponentially.
In conclusion, Bitcoin presents an exceptional opportunity, even for a financial powerhouse like BlackRock.
What are your predictions for the impact of BlackRock’s Bitcoin ETF on the price of Bitcoin?
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