BlackRock’s Spot Bitcoin (BTC) exchange-traded fund (ETF), approved by CEO and co-founder Michael Sharoff, will inject new institutional money into Bitcoin, but will eventually end up significantly lower. It will be the individual investors that will cause the price spike of facility custody platform Fireblocks.
On June 15th, investment giant BlackRock applied for a spot Bitcoin ETF, prompting other financial firms to apply as well, pushing the Bitcoin price to a one-year high.
But while many expect institutional involvement in cryptocurrencies to drive prices up even further, Shaurov noted that this is not always the case.
“If financial institutions participate in the market and participate in a quiet way, they can participate with little movement in price,” Shaurov told Cointelegraph during Australia Blockchain Week.
Shaurov said mid-2020 was another period of “massive inflows” of institutional money, but it wasn’t until later in the year that the retail craze for cryptocurrencies saw prices really rise.
“Despite the massive influx, the institutions were sufficiently sophisticated to [BTC] Go slow and use algorithms that don’t push the market. “
“50% increase” instead [came] from retail […] Because they’re not very sophisticated and they’re participating in ways that move prices dramatically,” he explained.
That said, Shaurov pointed out that the “physics of bitcoin” (mainly the finite supply) means that buying a lot of bitcoin will ultimately lead to big changes. .
“It will definitely make it easier for some institutions not currently in the market to add Bitcoin to their quota.”
Why Bitcoin?
Interestingly, Sharov, who founded FireBlocks in 2018, believes the Bitcoin narrative is still “playing out” at these institutions.
“Is Bitcoin a hedge against inflation?” Shaurov said, even today there are still many narratives based on Bitcoin. Is it a public reserve currency? Is it a hedge against government financial misconduct?
Shaurov said he personally believes Bitcoin is the “ultimate insurance asset.”
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“It has all the characteristics” [of something] For when everything goes wrong. It is an asset detached from the government. This is an asset that can be digitally native, an asset that can be easily moved. “
“It doesn’t matter if it’s worth $15,000, $20,000, or $60,000 at some point. he said.
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