While a BlackRock-certified Bitcoin (BTC) exchange-traded fund (ETF) will funnel new institutional money into Bitcoin, it will be retail investors who ultimately drive any significant price rally, according to Michael Shauloff, CEO and co-founder of the custodial platform. Institutional Fireblocks.
On June 15th, investment giant BlackRock applied for a Bitcoin ETF, which led to other financial firms filing their own, along with the Bitcoin price reaching its highest levels in a year.
However, while many hope that institutional involvement in crypto will skyrocket prices, Shaulov notes that may not necessarily happen.
“When institutions come to participate in the market and do it in a quiet way, they are able to do it almost without moving the price,” Shauloff told Cointelegraph during Australian Blockchain Week.
According to Shaulov, the middle of 2020 was another time that saw “massive inflows” of institutional money, but prices didn’t really go up until retail investors went crazy about crypto assets later in the year.
“While there were massive inflows, those institutions were sophisticated enough to acquire (BTC) slowly and use algorithms that wouldn’t drive the market.”
Instead, “a 50% increase came from retail (…) because they are participating in a less complex way and the price has moved significantly,” he explained.
However, Shauloff noted that the “physics of bitcoin” — essentially limited supply — means that any mass buying of bitcoin should end up moving the needle.
“It would certainly be easier for some institutions that are not currently participating in the market to add Bitcoin to their allocation.”
Why bitcoin?
Interestingly, Shauloff – who founded Fireblocks in 2018 – believes the narrative around Bitcoin still “works” for these institutions.
Today, there are still many narratives based on Bitcoin, Shauloff said: Is it a hedge against inflation? Is it a general reserve currency? Is this a hedge against government financial excesses?
You work for it.
They just print it and laugh about it.
Why would you play like that?# Bitcoin fix this. pic.twitter.com/omVxsB9zCV
– Daniel Prince (@PrinceySOV) June 26, 2023
Shauloff said he personally believes bitcoin is the “ultimate insurance asset.”
Related: Fireblocks VP: The big names aren’t coming back after discovering the potential of crypto payments
“It has all its properties (of something) when everything goes wrong. It’s an asset that’s separate from government. It’s an asset that can be digitally native, and it’s one that can be easily transferred.”
“It doesn’t matter if at some point it was worth $15,000 or $20,000 or $60,000. You just need to get enough of it in that disparity, in order to survive for a while,” he said.
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