Source: Blackrock; Compiled by Deng Tong, Jinse Finance
Summary
Bitcoin is the world's leading cryptocurrency asset, with rapidly growing adoption, attracting the attention of both individual and institutional investors.
Traditionally, directly investing in Bitcoin has faced many hurdles, such as opening new accounts, potentially high transaction fees, and addressing security challenges.
IBIT provides a convenient channel for Bitcoin investment through a familiar and common investment tool - the ETF.
Bitcoin is the world's leading and most widely adopted cryptocurrency, with a market capitalization of nearly $2 trillion. The global and decentralized nature of Bitcoin could potentially position it as a global currency alternative, potentially benefiting from geopolitical instability and declining trust in fiat currencies issued by institutions and governments. Investors have noticed that both institutions and individuals are adding Bitcoin to their financial assets. However, investing in Bitcoin has often presented many obstacles for investors, including the need to open new accounts, facing high transaction fees, and addressing security challenges. But just as ETFs have provided millions of investors with effective access to previously hard-to-reach markets such as gold and international stocks, IBIT now also allows investors to invest in Bitcoin in a convenient way.
The Rapid Adoption of Bitcoin
Since its launch in 2009, the adoption of Bitcoin has even outpaced other breakthrough technologies such as the internet and mobile phones. Several factors have accelerated this adoption, including:
Demographic Patterns: Younger generations are more likely to be seen as "digital natives" and thus more inclined to adopt Bitcoin than Gen X and Baby Boomers.
Global Shifts: Certain trends, such as inflation concerns, global political divisions, and banking and fiscal issues, have increased the appeal of Bitcoin as a decentralized asset.
The Future of Finance: Finally, the ongoing digital transformation of the global economy is changing the financial world, with the maturation of digital asset infrastructure lowering the barriers to entry and creating new use cases for Bitcoin.
Figure 1: The adoption of cryptocurrencies has outpaced the growth of mobile phones and the internet
Time required to reach 300 million users
The first cellular mobile phone was introduced in 1973. Source: NPR, Our World in Data. January 1, 1983 is considered the official birth date of the internet. Source: University System of Georgia, Our World in Data. The initial Bitcoin price was set in 2010. Source: Bloomberg, Cambridge Centre for Alternative Finance, Crypto.com.
Chart Note: The bar chart shows the time it took for cryptocurrencies, the internet, and mobile phones to reach 300 million users since their inception. Cryptocurrencies reached 300 million users faster than the internet and mobile phones.
3 Reasons Why IBIT Can Change the Bitcoin Investment Landscape
Although Bitcoin adoption is steadily increasing, directly investing in Bitcoin presents unique complexities for investors. This is why we have launched IBIT (the iShares Bitcoin ETF), to make it easier for everyone to invest in Bitcoin.
We believe IBIT can change the game for investors for the following reasons:
Access: IBIT allows you to access Bitcoin exposure within a traditional brokerage account. As an ETF, IBIT provides Bitcoin exposure, but trades like a stock. Therefore, it can be traded alongside other investments (such as stocks, bonds, and other ETFs) - both through taxable accounts and tax-advantaged accounts (such as a TFSA).
Convenience: IBIT can help reduce the complexity for investors to gain Bitcoin exposure. Directly purchasing Bitcoin often requires opening new accounts on cryptocurrency exchanges or selecting an online broker. To ensure their Bitcoin is as secure as possible, investors typically need to establish their own custody arrangements outside of cryptocurrency exchanges, which can be both expensive and risky. IBIT can help minimize these unique cryptocurrency barriers through a familiar and common investment tool - the ETF.
Integrated Technology: IBIT is managed by the world's largest asset manager and leverages multi-year technology integration developed in partnership with Coinbase Prime, the world's largest institutional digital asset custodian.
Conclusion: IBIT Opens a New Era for Bitcoin Investment
The emergence of a Bitcoin ETF marks an important milestone in the convergence of digital assets and traditional markets. The launch of IBIT stems from iShares' commitment to providing access, leveraging the convenience, efficiency, and familiarity of the ETF structure to enable more investors to invest in Bitcoin.
