Trade Alert

Buying BTC Here

_{Posted by Club Member Bonds 30.6.23}

Bitcoin is breaking above $30k following reports that BlackRock is seeking approval for a Bitcoin spot ETF. Fidelity (and a few others) also recently announced that it has filed a proposal for a spot BTC ETF.

BlackRock, as one of the largest and most established index fund providers, has tremendous experience navigating regulatory processes and hurdles for ETF approvals. I also think BlackRock is unlikely to file unless there’s some degree of confidence that it can receive approval.

This is an interesting development for BTC. A BTC spot ETF backed by an institution like BlackRock, with its global client base, if approved, will almost certainly translate to billions of dollars flowing into BTC.

BlackRock and Fidelity aren’t going to launch a new ETF product that they aren’t sure about client demand. If they are seeking to launch one, it has to be because they know there’s client demand. Plus, BlackRock is one of the largest asset managers in the world, and has marketed hundreds if not thousands of fund products to investors, so it clearly knows how to distribute new products.

Not saying that BlackRock’s (or others) application has a high likelihood of success, just pointing out that they have a ton of experience, and more importantly I think that the upside potential for BTC from an approval is significantly greater than the downside risk from a rejection.

The risk/reward for initiating a position in BTC now is asymmetric. The markets aren’t “holding its breath” for a BTC spot ETF approval, and broad sentiment around crypto still is poor (given the active legal cases against Binance and Coinbase), which means if BlackRock’s application is rejected, the downside reaction to BTC’s price could be mild. Conversely, if Blackrock or others were to be successful, I think the corresponding move in BTC’s price would be monstrous!

That said, many investors have been burnt investing in crypto, and the hype around blockchain has definitely faded. The enthusiasm from VCs to support blockchain projects and startups has not recovered and it probably won’t for a while, given their focus has now shifted toward A.I.

But I wouldn’t necessarily lump BTC with all these other blockchain projects and Alt coins. BTC has a much longer history, and has proven to be resilient. So, I’m a buyer of BTC right here, adding more if and when BlackRock successfully launches a spot BTC ETF.

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