In the world of cryptocurrencies, scepticism often surrounds influential players like BlackRock when they step into the Bitcoin arena. Questions arise about their intentions, as do they want to take control, manipulate, or even destroy Bitcoin.
Does BlackRock & Bitcoin Community Share the Same Aim?
Larry Fink, the head of BlackRock, and the Bitcoin community share a common desire to see Bitcoin become a widely accepted store of value and potentially a medium of exchange.
As Bitcoin enthusiasts, our vision is straightforward: we want Bitcoin to continue its growth as a store of value and eventually evolve into a medium of exchange.
On the other hand, BlackRock has a singular goal, i.e. making profits. They are primarily an asset management firm, which means they profit by expanding their assets under management (AUM). It’s quite straightforward; the more Bitcoin they hold in their ETF, the more they collect in fees.
Blackrock’s Hidden Incentive Game
Interestingly, BlackRock’s financial goals align with our interests. They have a strong incentive to promote Bitcoin’s awareness and adoption. Meanwhile, BlackRock is gearing up to deploy its sales professionals to educate its clients about Bitcoin to attract hundreds of billions of dollars into their spot ETF.
Eventually, their analysts predict that existing clients will pour $200 billion over the first three years into Bitcoin ETF. Assuming they achieve this target and charge a 60 basis point fee, they stand to earn a substantial $1.2 billion in annual fees.
Given BlackRock’s revenue multiple of 5.5x, this could boost its market capitalisation by a substantial $6.6 billion. For a company with a $97 billion market cap, this is substantial for a single product among its many ETFs.
Larry Fink’s Long Game Plan
Larry is well aware that Bitcoin carries more upside potential than any other asset in their ETF family. Further, considering this scenario, if Bitcoin experiences a 20x increase in value over the next decade, its Assets Under Management (AUM) could skyrocket to $4 trillion, driven primarily by this single product.
As a result, the fees generated from iBTC alone could reach a staggering $24 billion annually, propelling their market capitalisation to an additional $132 billion. (This scenario assumes that only 2% of BlackRock’s current AUM flows into iBTC.)
Yet, Larry Fink has grander aspirations. He understands that Bitcoin offers unmatched potential. If Bitcoin experiences a substantial increase in value over the next decade, its AUM could grow exponentially, along with its fees and market capitalisation.
Thus, bitcoin creates an unparalleled stage for incentives, making it an irresistible opportunity even for a financial powerhouse like BlackRock.