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The world’s largest asset manager BlackRock is currently selling Bitcoin (BTC) holdings in its exchange-traded fund IBIT, rather than buying them, a cryptocurrency market activity tracker says.
BlackRock’s presence in the cryptocurrency space has continued to grow after it launched a Bitcoin ETF called iShares Bitcoin Trust Bitcoin Holdings (IBIT).
However, recent insights suggest that the asset management firm may be selling BTC in response to the recent market correction.
BlackRock’s Bitcoin Market Activity Worries the Community
In May 2024, BlackRock moved a large amount of Bitcoin into cold storage, which the market sees as a long-term investment strategy. The move was seen as a bullish signal as investors were optimistic that one of the most conservative financial institutions was betting on the longevity of Bitcoin.
However, on December 26, BlackRock made headlines for selling $188.7 million worth of Bitcoin, marking its largest sell-off to date.
According to multiple sources, on the same day, BlackRock Asset Management transferred $1.88 billion worth of BTC to a Coinbase wallet. These transactions occurred multiple times, drawing the attention of market observers.
Currently, it is unclear whether they plan to divest their holdings or keep them on the exchange.
If BlackRock is indeed selling, it could lead to bearish sentiment in the short term, but long-term investors might see this as an opportunity to buy at lower prices.
However, institutional investors typically sell when they believe the market has peaked or to rebalance their portfolios, not necessarily because they hold a pessimistic view of the asset.
Meanwhile, according to on-chain data, on January 2, BlackRock's IBIT recorded the largest net outflow in a single day, with investors withdrawing $332.6 million. For the next four days, BlackRock's IBIT did not show a negative net investment flow until January 8, when outflows peaked at $100 million.
BIT is the largest Bitcoin ETF, with net assets of approximately $56.2 billion, and has been a dominant player in the cryptocurrency market. The ETF attracted over $37 billion in inflows, which we believe drove Bitcoin to a record high of over $108,000 in December.
BlackRock: Bitcoin's supply can change
In other news, BlackRock released an explanatory video questioning the immutability of Bitcoin's 21 million supply cap. The video attracted considerable attention within the crypto community after being shared, describing Bitcoin's supply limit as a 'hard-coded rule' aimed at controlling supply, maintaining purchasing power, and preventing excessive currency issuance.
The explainer outlined: 'There is no guarantee that the 21 million supply cap of Bitcoin will not change.'
The implications of the video sparked a debate about whether BlackRock's growing influence in Bitcoin could lead to the cryptocurrency being 'hijacked', with such information preparing the public for a potential supply cap increase.
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