Few actions taken on their own will have the kind of influence this ETF might have on the entire Bitcoin market. There is a lot of discussion among traders and industry experts about whether this BlackRock ETF could trigger a series of events that drive the price of Bitcoin into six figures due to the scale and scope of the digital asset market.
The application is still with the SEC, and it will probably be months before an official decision is made. Social media doesn’t, however, prevent speculators from doing so. Nevertheless, virtually everyone in the cryptocurrency industry agrees that this choice will determine whether the bull run gets started or the price continues to stagnate.
Providing a bridge for traditional investors
A Bitcoin ETF aims to provide a product where people can invest in digital assets without buying them directly from exchanges. Understandably, people who don’t understand cryptocurrency or Bitcoin refuse to invest in it. This is a wise move, as investing in products you do not know of is a one-way ticket to losing your money. Bridging the gap between knowledge and exposure is critical, and a few companies are looking to do this, not just through colossal investment funds like BlackRock.
Learning through practical use cases is something that works in any field. Think about when you first start a job. Although knowledge and training are fundamental, a lot of the practical learning comes from when you complete the task yourself. Finding a market that people enjoy and where Bitcoin and blockchain are practical has proven difficult for any business over the years.
However, one company that has made significant advances is the casino industry. By practically highlighting that blockchain technology is more effective in providing a frictionless direct transaction, the gambling industry is helping to educate people through practical use.
Gamers can play their favorite games, like blackjack and slots. The only difference is the stake. Cryptocurrency casinos provide a more secure service as there are fewer identifiable details. Still, casino gamers can also witness firsthand that playing slots or roulette games is just as effective with digital assets as with standard currency. Bitcoin slots use the same technology, display, and algorithms. The only significant change is that they use their service to show people the benefits of gambling with Bitcoin and playing slots or poker using the assets.
While initially, gamers might be apprehensive about how Bitcoin works, once you understand how to play everyday casino games like slots with even less hassle, it explains why so many gamblers are making the switch. Protecting yourself from risks within the cryptocurrency market is crucially important, and this is where a lot of the apprehension stems from. But once you learn how to be cautious and the practical uses of Bitcoin, you will uncover just how much potential it has to change society.
Why is a BlackRock ETF such big news?
Blackrock is the world’s biggest investment management company. Their investment fund, in net value, is double the valuation of Apple. As a trillion-dollar investment fund, their opinion and strategies shape the global market. It’s not just the American market where BlackRock has such a significant influence. If this Bitcoin ETF is improved, this will be international news.
A BlackRock ETF would provide a similar bridge for institutional investors like other hedge funds, pensions, and high-net-worth individuals. These investors understand ETFs, so they’ll understand how a Bitcoin ETF would work and be far more likely to invest. Even if BlackRock allocates 1% of its funds to cryptocurrency, this could inject $800 billion of liquid capital into the market. For reference, the current size of the whole market is around $1.2 trillion. At the peak of the 2021 bull run, Bitcoin’s market cap was $3 trillion.
While these numbers are hard to comprehend, it’s not just BlackRock’s entry into the market that will stir up such a fuss. It will validate Bitcoin in the eyes of many institutions and investors, who currently haven’t made any moves because they believe it is too risky and volatile. It could unlock the floodgates to one of the most significant inflows of wealth into an emerging market that anybody has ever seen. Alternatively, if the ETF is declined, it could send prices surging in the opposite direction.
In terms of one catalyst, the BlackRock ETF could be the most significant moment in the history of cryptocurrency. No other catalyst in the market will have as much of a profound effect as this ETF. Some people believed that Ripple (XRP) winning the court case might have kick-started momentum, but that token has fizzled away in the mediocrity of the current price action.
While the SEC losing to Ripple was great for the space, BlackRock entering it with an ETF is an entirely different dimension. If the ETF is approved, Bitcoin could do 30% in a day, perhaps more. Likewise, if it’s declined and other adverse market factors come into play, it could also move drastically downwards.