BlackRock Bitcoin ETF surpasses MicroStrategy holdings

Institutional demand drives Bitcoin ETF growth as OTC platforms struggle to meet orders

Published: Mar 12, 2024 03:08:01 PM IST

Updated: Mar 12, 2024 03:07:43 PM IST

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BlackRock's BTC exchange-traded fund (ETF) has surpassed MicroStrategy's cryptocurrency holdings. As of March 8, BlackRock's IBIT (iShares Bitcoin Trust) holds 197,943 BTC, valued at over $13.5 billion. This achievement comes after nearly 40 trading sessions after the approval of nine new funds by the United States Securities and Exchange Commission (SEC) on January 10.

Excluding Grayscale's GBTC, the newly introduced Bitcoin ETFs collectively hold assets worth $28 billion, reflecting the ongoing institutional demand driving the cryptocurrency's ascent. On March 8, Bitcoin's price exceeded $70,000 for the first time.

Over-the-counter (OTC) trading platforms are experiencing a shortage of Bitcoin and are resorting to public exchanges to fulfil orders. Typically, OTC desks cater to large-volume traders, including institutional investors.

Despite not being an ETF issuer, MicroStrategy has amassed a portfolio of 193,000 BTC as part of its corporate treasury strategy. The company employs a leveraged operating strategy, utilising debt to finance its operations and investments.

MicroStrategy is intensifying its commitment to its Bitcoin strategy, recently announcing plans for a debt offering aimed at raising over $600 million to bolster its Bitcoin reserves.

The company's Bitcoin-centric approach has led to MicroStrategy's (MSTR) stock being dubbed a "leveraged Bitcoin ETF." This strategy has proven successful thus far, with MSTR seeing a 642 percent surge in the past 12 months, outperforming Bitcoin's 244 percent gains during the same period.

The emergence of BlackRock's Bitcoin ETF outpacing MicroStrategy's holdings illuminates the evolving dynamics of institutional investment in the crypto market. As over-the-counter platforms face challenges meeting demand, MicroStrategy's strategic accumulation of Bitcoin and its innovative leveraging tactics underscore a growing trend of corporate involvement in the digital asset space. This development not only reflects the maturing of Bitcoin as an investment vehicle but also signals broader shifts in traditional finance towards embracing cryptocurrencies.

Notably, the US SEC is slated to announce its decision on the approval of Ethereum spot ETFs in the coming months. There's a high possibility that Ethereum will also have these instruments approved, which is something crypto enthusiasts are looking forward to greatly. ETH might see a similar period of heightened activity following this event.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist.

Twitter: @bhardwajshash