Author: BOB
Editor: Yuan Xin
According to niubite.com, Shenyu, co-founder and CEO of Cobo, predicted in the 2024 Hong Kong Web3 Carnival "Roundtable Discussion: Fifteen Years of Bitcoin ":
The prediction that " Bitcoin price will reach 1.5 million US dollars in 2030" is still conservative. Bitcoin will usher in an explosion of large-scale applications in one or two cycles, and there will be several times the room for growth. The core players involved will be large financial institutions .
"Institutionalization of cryptocurrency" is undoubtedly a major trend in the future. After more than ten years of development, cryptocurrency is moving from a niche fringe asset to a mainstream asset. The crypto market is gradually transitioning from only a few geeks participating to being dominated by financial institutions.
For example, spot Bitcoin ETFs and tokenization of financial assets also require the participation and leadership of financial institutions. Among these financial institutions, BlackRock, as the world's largest asset management giant, not only has a huge influence in traditional finance, but has also begun to make in-depth layouts in Web3. Its influence in Web3 has surpassed Grayscale and MicroStrategy, and it will become a new leader.
What are BlackRock’s main plans for Web3?
1. MicroStrategy Major Shareholders
Everyone is familiar with MicroStrategy , the American listed company that continues to buy Bitcoin. In fact, the company's main business is business analysis software.
In 2020, the board of directors unanimously agreed to include Bitcoin as the company's main reserve assets. Since then, MicroStrategy has increased its holdings several times and boldly bought it several times when the price fell below the cost price.
MicroStrategy's "fool-proof" move to buy Bitcoin is considered unwise or even stupid by many investment "gurus".
But few people know that it is this silly buying strategy that makes MicroStrategy make a fortune.
MicroStrategy holds more than 210,000 bitcoins, with an average cost of $35,160 per bitcoin. Based on the market price of Bitcoin on April 10, MicroStrategy has made a profit of $7.2 billion.
MicroStrategy's continuous buying strategy not only made a lot of money on Bitcoin holdings, but also drove up stock prices, which can be said to be killing two birds with one stone.
It is worth mentioning that MicroStrategy's main business revenue performance is getting worse, but its Bitcoin holdings are expanding. This phenomenon has led to a deep binding relationship between the company's stock price and the Bitcoin price.
When the price of Bitcoin skyrocketed, MicroStrategy's stock soared even more, that is, the stock price had a considerable premium.
For example, in the past year, the increase of Bitcoin was 131%, while that of MicroStrategy stock was 360%, a difference of nearly 3 times. In the past six months, the increase of Bitcoin was 150%, but that of MicroStrategy stock was 323%, a difference of 2 times.
It is precisely because of the existence of a long-term premium that for many institutions or retail investors, investing in microstrategy stocks not only can obtain higher returns (twice or more) than directly investing in Bitcoin, but also saves unnecessary troubles such as private key management and compliance.
Therefore, before the spot Bitcoin ETF is approved by the SEC, holding MicroStrategy shares is actually equivalent to indirectly investing in Bitcoin, which is also the main reason why many asset management institutions hold MicroStrategy shares.
Among the major holders of MicroStrategy stocks, we see BlackRock.
According to data from Yahoo Finance, BlackRock ranks third among the largest institutional shareholders of MicroStrategy, with a shareholding value of US$1.4 billion. It is through this form that BlackRock indirectly holds Bitcoin risk exposure.
2. Spot Bitcoin ETF
So far, BlackRock’s biggest contribution to the crypto market is the spot Bitcoin ETF.
In June 2023, BlackRock submitted an application for a spot Bitcoin ETF to the SEC. After more than half a year of communication and coordination with the SEC, the SEC finally approved 11 spot Bitcoin ETFs at the same time on January 11, 2024.
In fact, the spot Bitcoin ETF was proposed as early as 2013, but over the course of a decade, the SEC has rejected more than 30 similar applications.
It can be seen that BlackRock played a very critical role in promoting the approval of the spot Bitcoin ETF, which is mainly due to BlackRock's huge influence in the US political and financial circles.
As the world's largest asset management institution, BlackRock manages funds worth approximately US$10 trillion, making it rich enough to rival a country.
At the same time, BlackRock and the US government also have an inseparable relationship. After the collapse of Silicon Valley Bank in the United States last year, the "Wall Street scavenger" BlackRock was hired as a consultant to help the US government arrange the sale of $114 billion in securities held by the bankrupt Signature Bank and Silicon Valley Bank.
The milestone positive news of the spot Bitcoin ETF has greatly promoted the compliance process of Bitcoin, and this epic positive news was mainly driven by BlackRock.
As of now, the total net asset value of spot Bitcoin ETFs is US$57.8 billion, the ETF net asset ratio (market value as a percentage of the total market value of Bitcoin) is 4.25%, and the historical cumulative net inflow has reached US$12.37 billion. BlackRock IBIT is the spot Bitcoin ETF with the largest net inflow.
According to statistics, the number of bitcoins held by BlackRock Bitcoin ETF has exceeded 260,000, exceeding the number of bitcoins held by MicroStrategy (210,000).
Grayscale, as an important driving force of the last bull market, currently holds 310,000 bitcoins, which is only 50,000 more than the number held by BlackRock IBIT.
With the continuous outflow of Grayscale Spot Bitcoin ETF and the continuous inflow of BlackRock Spot Bitcoin ETF, the number of bitcoins held by BlackRock IBIT will definitely exceed the holdings of Grayscale GBTC, and thus become the institution holding the largest number of bitcoins. This also means that BlackRock will replace Grayscale and become the new leader in this field.
3. Entering the RWA track
After the spot Bitcoin ETF was approved, BlackRock CEO Larry Fink said that the next trend is the tokenization of financial assets.
The tokenization of RWA (real world assets) is a major catalyst for this bull market and will also be a major trend in the crypto market in the next few years.
For Web3, the income from DeFi mining is getting lower and lower, and it urgently needs to be supplemented by real-world assets. For Web2, it needs to significantly reduce management costs through blockchain technology. RWA builds a bridge between Web2 assets and Web3 assets, and trillions of dollars of real-world assets will enter Web3 through RWA.
According to Boston Consulting Group, the tokenized asset market is expected to reach $16 trillion by 2030, which also means huge potential for tokenization. Obviously, BlackRock has already set its sights on this piece of cake.
On March 20, BlackRock announced the launch of its first tokenized fund issued on a public blockchain, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL).
It is reported that BUIDL will subscribe to Securitize, a digital asset focused on RWA, to serve qualified investors, and the funds will be held by official custodians. The fund will invest 100% of its total assets in cash, U.S. Treasury bonds and repurchase agreements, allowing investors to earn income while holding tokens on the blockchain.
BlackRock and Securitize cooperated to launch a tokenized fund, which triggered a surge in the RWA track. For example, ondo, RIO, CFG and GFI tokens have all seen an increase of more than 100%. With BlackRock's huge influence, it will surely accelerate the development of the RWA track.
In short, whether it is the spot Bitcoin ETF that brings Web3 assets into the Web2 world, or the RWA tokenization that brings Web2 assets into the Web3 world, BlackRock has played a vital role in these two exploration directions. Through its global influence, it will accelerate the integration of Web2 and Web3, and will also attract more institutions to enter the market. In the process of promoting the large-scale application of blockchain technology, BlackRock has made an indelible contribution.
PS This article does not constitute any investment advice
