Bitcoin Goes Mainstream

Bitcoin (BTC), founded in 2009, has made regular appearances in the news since its significant surge in late 2017. Many might assume that its recent resurgence in the headlines signals yet another Bitcoin frenzy.  However, there is a distinct difference this time.

The current buzz surrounding Bitcoin is primarily driven by a powerful and unique factor: institutional investors. Previously, nearly all previous Bitcoin cycles were spearheaded by retail investors. Although retail investors constitute a substantial segment of the market and can influence significant movements (as seen with GameStop), institutions operate on a different scale altogether. Handling billions, even trillions, of dollars, they don't just influence the market - in many ways, they are the market. Their involvement lends a newfound legitimacy and weight to Bitcoin.

Though there have been several attempts to package Bitcoin into various products beyond merely holding the cryptocurrency, few of these offerings were user-friendly. However, this is set to change with the advent of the Bitcoin ETF. A number of funds have recently sought approval for spot Bitcoin ETFs (ETFs that trade directly in correlation with Bitcoin, akin to Gold ETFs). Of these, BlackRock and Fidelity are arguably the most significant.

BlackRock is the world's largest asset manager, boasting $9.4 trillion under its management.  It offers some of the market's most sought-after EFTs at competitive rates, which attracts more customers. The firm has announced that Coinbase Custody will oversee its Bitcoin assets, further reinforcing its commitment and credibility in the cryptocurrency domain. A question lingering in many minds is: just how much BTC does BlackRock possess? Lately, there have been whispers about unidentified wallets acquiring vast amounts of Bitcoin, and rumors suggest that BlackRock has been amassing Bitcoin for several years.

Fidelity, in contrast, has constructed its own unique infrastructure. Given that they've been mining Bitcoin since 2014, it's widely believed that they are well-prepared to launch their BTC ETF. With Fidelity's stature as one of the premier brokerage platforms, linking it to their 401k offerings could simplify and secure the process for the average retail investor to possess Bitcoin. This opens up immense market potential, enabling many to seamlessly incorporate Bitcoin into their retirement portfolios.

Once spot Bitcoin ETFs receive their green light, it will unmistakably signal Bitcoin's permanent foothold in the financial landscape, ushering in a tide of fresh capital. However, history has shown that the introduction of a new Bitcoin product often precedes a transient dip in its value. So, we're left wondering: might this new era of Bitcoin adoption commence on a subdued note?