BlackRock’s Bitcoin exchange-traded fund (ETF), known as IBIT, has recently exceeded the Bitcoin holdings of MicroStrategy, a major technology firm. As per BitMEX Research’s latest data, on March 8, IBIT held a staggering 197,943 Bitcoins, valued at over $13.5 billion, a mere 40 trading days following the Securities and Exchange Commission’s January 10 approval of nine new funds. This milestone underscores the growing interest in cryptocurrency investment vehicles on Wall Street.
Impact of Institutional Demand on Crypto Markets
Newly introduced Bitcoin ETFs are capturing significant attention, with institutional appetite contributing to a surge in Bitcoin’s valuation. Excluding Grayscale’s Bitcoin Trust (GBTC), these ETFs have amassed $28 billion in assets. The collective interest has helped push Bitcoin’s price over the $70,000 threshold for the first time on March 8.
A shift in market dynamics has been noted, where over-the-counter (OTC) platforms—typically favored by high-volume traders—are witnessing a dwindling Bitcoin supply. This has led to an increased reliance on public exchanges to meet purchase demands.
MicroStrategy’s Aggressive Bitcoin Investment Strategy
While not an ETF issuer, MicroStrategy has made a significant mark in the cryptocurrency space by incorporating 193,000 Bitcoins into its corporate treasury strategy. The company leverages Bitcoin to hedge its operations and investments and recently announced a debt offering exceeding $600 million to further increase its Bitcoin portfolio. This aggressive tactic has seen their stock likened to a leveraged Bitcoin ETF fund.
MicroStrategy’s shares have surged 642% in the past year, dwarfing Bitcoin’s 244% rise, thanks to its Bitcoin-focused approach. CEO Michael Saylor, a vocal advocate for Bitcoin, insists on holding onto the cryptocurrency, touting its technical advantages over traditional assets like gold, the S&P 500, and real estate. He dismisses the notion of selling the “winner” in favor of the “loser,” signifying his long-term commitment to Bitcoin’s growth potential.