Key Points
- Bitcoin is nearing its all-time high due to increased institutional demand and the upcoming fourth Bitcoin halving.
- BlackRock Inc has filed with the SEC to start investing in Bitcoin through approved spot ETFs.
Bitcoin’s price is on the brink of surpassing its highest ever value, a resurgence spurred by a surge in institutional demand. The inflow of capital into the cryptocurrency has peaked for the first time in over two years, setting the stage for a significant price surge. Additionally, the upcoming fourth Bitcoin halving, set to take place in approximately 46 days, will cut the daily Bitcoin supply from 900 to 450 coins.
The increase in Bitcoin’s price is being driven in part by the demand from spot Bitcoin ETFs, led by iShares Bitcoin Trust (NASDAQ: IBIT) offered by BlackRock Inc (NYSE: BLK). These ETFs have been purchasing around $600 million worth of Bitcoin daily for several weeks. Despite high operating fees causing significant outflows from the Grayscale Bitcoin Trust (GBTC), more wealth managers are increasing their Bitcoin holdings via spot ETFs.
BlackRock’s Growing Interest in Bitcoin
BlackRock’s adoption of Bitcoin has been a key factor in driving widespread adoption of the cryptocurrency. BlackRock, a leading fund manager with over $9 trillion in Assets Under Management (AUM), has a significant influence on the U.S. economy.
Earlier this week, BlackRock filed with the United States Securities and Exchange Commission (SEC) to notify the regulatory body that it plans to begin investing in Bitcoin through approved spot ETFs as part of its Strategic Income Opportunities Portfolio.
The company’s decision to purchase more Bitcoin is expected to prompt other Wall Street firms to do the same. Bitcoin’s potential as a hedge against inflation and a store of wealth in the face of global geopolitical threats makes it an attractive investment.
At the time of writing, BlackRock’s IBIT held approximately 164,501 Bitcoins, worth around $10.1 billion. With a sponsor fee of around 0.25 percent, the IBIT continues to attract more investment, largely due to its deep liquidity and strong reputation.
Bitcoin’s Near-Term Price Prospects
For the first time in Bitcoin’s history, the cryptocurrency has consistently closed above the 0.618 Fibonacci Retracement level prior to a halving event. This suggests that Bitcoin’s price could rise even more dramatically than it did during the 2021 bull run.
However, Bitcoin’s price has hit a psychological resistance level near its all-time high, which could lead to a short-term price correction before the upward trend continues. Additionally, Bitcoin’s dominance on a weekly basis has shown signs of weakness, which could mean that investment in altcoins could increase in the coming weeks.
