This week (10 March), institutional investment giant Blackrock’s Bitcoin ETF hit $10bn, becoming the fastest in history to do so. Despite initial difficulties getting approval for the fund, IBIT has proven that cryptocurrencies are no longer solely the domain of bedroom traders and web3 enthusiasts.
Bitcoin is currently worth over $72,250 – an all-time high – and Bloomberg reports that over $2.7bn flowed into crypto assets last week – another record. Nathalie Janson, associate professor at NEOMA Business School, believes that BlackRock’s ETF played a key role in these feats.
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“The introduction of Bitcoin ETFs has greatly simplified access to this cryptocurrency for investors,” he explains to Private Banker International. “Thanks to trusted entities such as BlackRock, asset management is delegated, offering a secure and accessible solution for those looking to invest in Bitcoin.
“BlackRock’s credibility reinforces investors’ confidence in these products, while the invested amounts exceeding initial expectations demonstrate a growing interest in this new asset class.”
Reda Farran, Chartered Financial Analyst at financial information platform Finimize, agrees, though he notes that a large portion of the initial investors in the IBIT may have come from existing funds.
“A lot of the inflows into IBIT and the other newly launched ETFs were from investors who were previously trapped inside Grayscale’s pricier Bitcoin Trust (GBTC),” says Farran. “Still, since their introduction on January 11, the cumulative net purchases of all the ETFs now amount to 180,000 bitcoins – more than three times the number of new coins mined over that same period.”
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By GlobalDataRegulatory advancements are bringing crypto mainstream
Cryptocurrency has long been seen as the ‘wild west’ of finance, but, as GlobalData’s Cryptocurrencies report outlines, regulations are changing this perception. New EU legislation passed in January worked to tackle money laundering in the sector by forcing crypto-asset service providers to perform checks on any transactions over €1,000, and the US Securities and Exchange Commission is in the process of defining the asset type of currencies through various lawsuits.
The UK is also working to ensure greater legal protections for holders of crypto. As Richard Marshall, legal director at international law firm Hill Dickinson, explains: “UK Courts have worked hard to ensure that crypto assets are protected by law by interpreting their legal persona as a form of personal possession. Legal protection brings rights of recovery and enforceability, which traditional assets have the benefit of, should a wallet be defrauded for example.
“The Law Commission of England and Wales have gone one step further in recently proposing draft legislation to ensure crypto assets are viewed as a form of personal property on the statute books. This is also with the intention of providing more legal certainty for those who own and deal in crypto assets.”
Elsewhere, the UK’s current government is working to further bring cryptocurrencies into the fold of mainstream finance through regulations that will apply similar rules to crypto exchanges as currently are applied to banks and financial services firms.
Peter Wood, CTO at web3 and blockchain recruitment agency Spectrum Search, sees the IBIT as indicative of increased trust in cryptocurrencies as a part of the financial system.
He argues: “The correlation between the ETF’s success and Bitcoin’s rising price underscores a broader trend: as traditional financial institutions embrace digital assets, we’ll likely witness more substantial and stabilising capital flows into the market. This transition represents a significant shift from the speculative, retail-driven investments that previously characterised the space to a more mature, growth-oriented phase.
“From an innovative perspective, the IBIT ETF’s impact on Bitcoin extends beyond mere investment inflows. It signifies a critical step towards integrating blockchain and cryptocurrency into the fabric of global finance. This integration promises to unleash a new era of efficiency, transparency, and inclusivity in financial systems.”
