Forget Microstrategy. Ignore Grayscale. Skip Ark Investments.
This is minor league stuff. When it comes to game changers, these companies are small potatoes.
Now it is time for the Big Dog to enter the ring.
Grayscale is doing very well. It now has over $27 billion in Assets Under Management (AUM). That is a great windfall for Bitcoin.
Things are about to get a lot more interesting. In the above image, Grayscale is the dog on the left. So who is on the right?
That would be none other than BlockRock, the largest asset manager, with over $8 TRILLION in assets under management. That overwhelms the numbers when you compare Grayscale, Microstrategy, and Ark. In fact, BlackRock will outpace near every asset manager there is.
According to the filing with the SEC, BlackRock is looking to get into the space through Bitcoin.
“Each Fund may use instruments referred to as derivatives, which are financial instruments that derive their value from one or more securities, commodities (such as gold or oil), currencies (including Bitcoin)”
The company is looking at how they are doing businesses. 2020 was the year that institutions awoke to what is going on within the world of cryptocurrency. This led to a number of firms entering, but that was just the beginning.
BlackRock is going to take a different approach. It will likely build a platform where it accesses Bitcoin through the futures market. This is not surprising since it allows for the firm to leverage their position rather easily. It also does not require handling the physical commodity (keys in this case).
The reason why this is so important is the sheer size of the holdings of BlackRock. This company could play with billion of dollars and not even tough a decent percentage of what they hold. Not many companies can do this.
It also starts to open Pandora's Box even more. While the money will flow it, this might not be the best thing long-term. With such a small market, the tendency for manipulation is great. A company like BlackRock has the ammunition to serious move the markets as it sees fit.
This, of course, will be more difficult if the market cap of Bitcoin keeps heading higher. The larger the market, the harder it is to maneuver.
There is little doubt that the Bitcoin appeal is spreading rapidly. With the major Wall Street firms entering the fray, it only adds a great deal more legitimacy as an asset class. We also see strange bedfellows as Wall Street and the crypto maniacs are now on the same side, albeit for much different reasons.
With BlackRock, there is little stopping the next wave of large firms from entering. While holding Bitcoin might not be in the cards, other avenues might be more appealing to the likes of insurance companies and pension funds.
Bitcoin is certainly garnering up a lot of money from Wall Street. This takes it away from its original purpose but should provide a faster growth rate for the industry.
Alt-Coins are going to be the ones who have to pick up the original vision and run with it.
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