BlackRock Now Controls Over 3% of Bitcoin Supply

TLDR

• BlackRock now controls over 3% of the total Bitcoin supply.
• That’s nearly 100k more BTC than what Strategy owns.
• BTC purchases of over $100k now make up nearly 90% of transactions on the Bitcoin blockchain.

BlackRock, the world’s largest asset manager, now controls more than 3% of the total Bitcoin supply. Why does this matter? Well, it’s reshaping the dynamics of crypto ownership and signaling a strong gravitational pull toward institutional adoption.

For aspiring Bitcoin investors (and even those deeply entrenched in blockchain ecosystems), this begs some critical questions. How does this development affect users? Is it good or bad for Bitcoin’s growth as an alternative asset? Let’s get after it.

BlackRock’s Bitcoin Domination at a Glance

BlackRock, through its highly successful iShares Bitcoin Trust (IBIT) ETF, has acquired a jaw-dropping $69.7 billion in Bitcoin, amounting to approximately 3.25% of the total Bitcoin supply. How much BTC is that? Over 683k BTC, which is nearly 100k more than what Strategy has.

Source

Here’s why this is monumental:

• 54.7% dominance in U.S. spot Bitcoin ETFs: BlackRock’s iShares Bitcoin Trust now controls over half the market for U.S. spot Bitcoin ETFs.
• Massive inflows: Recently, Bitcoin ETFs experienced consistent inflows over an eight-day period, accumulating $388 million worth of Bitcoin on a single day.
• Global Rank: The IBIT ETF is now the 23rd largest ETF in the world, a feat achieved in under two years.

This institutional shift towards Bitcoin showcases an evolving trust in cryptocurrency as a legitimate asset class. Pretty impressive for an asset so many people still say “isn’t real money”.

What This Means for Retail Investors

Well, it’s honestly a double-edged sword.

The phrase “BlackRock owns 3% of Bitcoin” might sound like the endgame for individual investors. But take a beat before you panic. Here’s what you need to consider:

1. The Growing Role of Big Money in Bitcoin

It was going to happen sooner or later. We all knew it.

Institutional players like BlackRock entering the Bitcoin market can push its price higher over the long run, which is great, especially for people who got in early or bought a solid dip. 

With institutional adoption comes legitimacy, and with legitimacy comes increased demand. But there’s a flip side. Consolidating control among a few big players can reduce the decentralized aspect that Bitcoin was built on. More on that in a bit.

How does it affect you? 

If you’re just getting into Bitcoin, the market might feel more like Wall Street and less like a decentralized network. And honestly, those lines are, in fact, starting to blur. However, the growing attention also boosts Bitcoin’s credibility. Simply put, more “big money” equals a more stable and mainstream asset.

Some people are all for it. Purists are not, mostly for purist reasons.

2. Retail Participation is Evolving

While retail investor interest in Bitcoin hasn’t disappeared, Glassnode reports show a clear shift in transaction behavior:

• At ATHs, average volume were transaction was nearly $60k — meaning that while there are fewer transactions happening, each move is for a larger amount of coins with higher dollar values attached.
• Meanwhile, transactions over $100,000 have climbed to dominate nearly 89% of network activity.

Source

Note: The above link goes to an amazing article by Glassnode. We highly recommend checking that out.

What does this mean for users? 

It indicates that large institutional players are becoming key drivers of Bitcoin’s market activity. For smaller investors, smaller transactions may no longer hold the same influence they once did, but strategic investments still provide access to Bitcoin’s long-term growth potential.

3. The ETF Phenomenon Levels the Playing Field

Bitcoin ETFs, such as BlackRock’s IBIT, are making it easier for retail users to own Bitcoin without having to deal with wallets, private keys, and other related concerns. 

Is that a good thing? For some folks, yeah. It removes some of the complexity, which has been a barrier for beginners for far too long. On the other hand, it’s killing on-chain transactions. 

The Ordinal and Runes market (the Native Bitcoin chain version of NFTs) is fading. On top of that, Ethereum, Solana, and Base are controlling the majority of DeFi funds. Ethereum alone has 10x the TVL of BTCFI, as it’s known. 

Another issue? With BlackRock dominating the ETF market, its decisions could influence the value and accessibility of ETFs. The best move here is education. Know your asset and understand what you’re investing in. If you don’t like the cut of BTC’s jib anymore, there are tons of options.

Should You Be Worried About Decentralization?

One of Bitcoin’s main appeals has always been its promise of decentralization. However, with large entities like BlackRock controlling huge chunks of BTC through ETFs, legitimate concerns about centralization are surfacing.

This doesn’t mean decentralization is dead. 

Smaller investors should stay informed and consider ways to participate directly in the Bitcoin network. And while the odds of users making the money people did ten years ago are drastically shrinking by the day, there is still significant value in holding BTC, regardless of price action.

IBIT’s Amazing and Brief History

Take a second to marvel at these staggering figures:

• BlackRock’s iShares Bitcoin Trust launched less than 1.5 years ago (January 2024).
• Today, it holds 54.7% of the U.S. spot Bitcoin ETF market share.
• It has firmly entered the Top 25 ETFs globally by assets under management.

Institutional adoption is accelerating at record-breaking speed.

What Does the Future Hold For Retail Crypto Investors?

Bitcoin has evolved into a long-term store of value, much like gold. BlackRock’s investment is a clear indication of this. Focus on strategic, sustainable investments over “get rich quick” schemes for the best long-term value.

Even if Bitcoin dominates headlines, it’s not the only crypto worth holding. Ethereum and other altcoins are experiencing growth in their ecosystems. Don’t hesitate to explore diversified crypto opportunities.

If you’re worried about how to buy, store, or trade crypto securely, leverage beginner-friendly platforms (like Dypto Crypto) and educational resources (also…like Dypto Crypto). We’ve made it simple for you to begin building your crypto portfolio.