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July 10, 2023

Bitcoin Peaks at Year Highs as BlackRock CEO Compares BTC to Gold

July 10, 2023

In an unexpected turn of events, BlackRock’s CEO Larry Fink has publicly praised Bitcoin, likening it to “digitized gold” and acknowledging its potential as an international asset and store of value.

The unexpected endorsement sent Bitcoin to 13-month highs, which was subsequently buoyed by fresh Bitcoin Spot ETF filings from leading financial institutions including BlackRock, Valkyrie, and Fidelity.

Alongside increased institutional stirrings, recent data analysis has revealed that daily Dollar Cost Averaging (DCA) has proven to be a profitable strategy for Bitcoin investors.

  • BlackRock’s, Larry Fink, briefly sends Bitcoin to new year highs
  • Bitcoin dollar cost averagers (DCAers) are rewarded
  • Bitcoin Spot ETFs are refiled after SEC-recommended update

BlackRock’s Larry Fink briefly sends Bitcoin to new year highs

In what may turn out to be one of the biggest U-turns ever witnessed, Larry Fink, the CEO of BlackRock has praised Bitcoin for its ability to “digitize gold.”

In the past, Fink has been a strong critic of Bitcoin and the entire cryptocurrency industry, referring to Bitcoin as an “index for money laundering” during some interviews. However, it appears the financial asset manager is coming around.

During an interview with Fox Business last Wednesday, Fink described Bitcoin as an “international asset.” 

“Instead of investing in gold as a hedge against inflation … or the devaluation of your currency … [bitcoin] can represent an asset that people can play as an alternative,” Fink stated. 

By making the comparison between Bitcoin and gold, Fink reinforced the notion that Bitcoin can function as a store of value, just as gold has done for centuries. Moreover, he underscored the global nature of Bitcoin, highlighting its potential inflation-fighting capability. 

After the interview went viral on Wednesday and Thursday, Bitcoin peaked at a new 2023-year high of $31,357. Despite losing those gains during the following 24 hours, the coin stayed above the psychological level of $30,000 for the remainder of the week. 

Bullish sentiment flooded the industry as the CEO’s acknowledgment of Bitcoin’s international appeal could strengthen the case for increased institutional interest and investment in the cryptocurrency. 

After BlackRock’s Bitcoin Spot ETF filing in June, it is evident that both the CEO and the company perceive Bitcoin as a transformative force in the financial landscape. 

With BlackRock’s immense influence and expertise, the prospect of wider adoption of Bitcoin and other cryptocurrencies by institutional investors is now more tangible than ever before.

Larry Fink interview with Fox Business
Larry Fink interview with Fox Business

Bitcoin dollar cost averagers (DCAers) are rewarded 

Recent data analysis released last week, suggests that Dollar Cost Averaging (DCA) has proven to be a profitable strategy for dedicated Bitcoin investors,

In a tweet by prominent Bitcoiner, @w_s_bitcoin, also known as “Wicked,” a chart displaying the “weighted average cost of purchased Bitcoin” revealed that investors who consistently employed the DCA strategy on a daily basis can now consider their approach successful, regardless of their initial investment period.

DCA is a strategy wherein investors allocate a fixed amount of money into a stock or cryptocurrency at regular intervals, irrespective of price fluctuations. The method aims to alleviate the stress and complexity of timing a notoriously volatile market.

According to the chart, as of July 3, the weighted average cost of purchased Bitcoin reached $31,233, marking its highest price since June 2022. Wicked explained that when the entire orange line falls below the dotted white line, all daily DCA investors are in profit.

However, it’s important to note that not all Bitcoin holders are experiencing gains, especially those who purchased at the peak of $69,000 in November 2021 and did not take any further action. 

On the other hand, individuals who continued their daily recurring buys from that point until now managed to compensate for their losses by purchasing during market lows, such as when Bitcoin dropped below $16,000 after the FTX incident.

Prominent Bitcoin Standard author, Saifedean Ammous, tweeted on Monday, “Regular stacking is profitable for everyone even when Bitcoin is down 55% from the top,” emphasizing the astonishing power of Bitcoin as a wealth protector.

Bitcoin has increased by more than 80% since the start of 2023, primarily driven by dwindling confidence in the traditional banking system in March and the increasing probability of a Bitcoin spot ETF receiving approval in the United States, following BlackRock’s filing in June.

Weighted averaged cost of purchased Bitcoin
Weighted averaged cost of purchased Bitcoin

Asset managers BlackRock and Valkyrie have refiled their applications for Bitcoin spot exchange-traded funds (ETFs) with the US Securities and Exchange Commission (SEC). 

The revised filings now include surveillance-sharing agreements with US-based crypto exchange Coinbase. The move aims to address fresh concerns that were raised by the SEC regarding a lack of adequate surveillance measures and potential market manipulation in the spot market. 

If approved, these ETFs would allow investors to gain exposure to Bitcoin without the need to hold the digital asset directly.

In collaboration with Nasdaq, BlackRock finalized a surveillance agreement with Coinbase on Monday. The agreement, known as the Spot BTC SSA (Surveillance Sharing Agreement), will supplement the exchange’s own market surveillance program. 

By utilizing Coinbase as the custodian and relying on its spot market data, BlackRock aims to address the SEC’s objections regarding market surveillance.

Following suit, cryptocurrency fund manager Valkyrie also refiled its application for a spot Bitcoin ETF on Thursday. The updated filing includes a similar surveillance-sharing agreement with Coinbase, that will grant Nasdaq supplemental access to spot Bitcoin trade data.

The news of BlackRock’s amended application at the start of the week sparked bullish sentiment which then continued as both Valkyrie and also Fidelity made similar changes. 

Since BlackRock filed for a Bitcoin Spot ETF on June 15, Bitcoin’s price has risen by approximately 20%, which demonstrates the excitement behind such a development. The positive market response has, so far, outweighed suggestions of application inadequacy made by the SEC.

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