On the eve of the Bitcoin halving, the stock prices of Bitcoin mining companies have risen sharply this year, even several times higher than the increase in BTC, which is very strong. According to Futu’s latest equity disclosure data, as of August 31, 2023, three institutional investors have increased their holdings of crypto mining service provider Bitdeer’s shares (BTDR). They are: U.S. Assets Management giant BlackRock, European large fund First Trust Advisors LP, Credit Suisse Asset Management.
In addition to massively increasing its stake in BitDeer, BlackRock, a Wall Street giant with more than $9 trillion in assets under management, is actually the third owner of the world's four largest Bitcoin mining companies, including Riot Blockchain, Marathon Digital, Cipher Mining, and Terawulf. The second largest shareholder.
It can be seen that institutional funds are slowly entering the Bitcoin economy and constantly buying more shares of Bitcoin mining companies. It is obvious that BlackRock has predicted the growth of this industry, and the potential spot BTC ETF may become the source of Bitcoin’s surge. catalyst. Regardless of the fate of the proposal, BlackRock's continued deployment of Bitcoin infrastructure provides a clear bullish bet from institutional funds on the industry, despite some voices claiming that BlackRock has the best chance of gaining approval to date. picture.
Many people speculate that BlackRock has already collected a large amount of BTC, then purchased shares of mining companies and submitted applications for spot Bitcoin ETFs. All of these moves seem to work well together, leading to a bold conclusion: BlackRock has a premeditated plan and plans to make the price of Bitcoin explode.
Jamil Nazaralir, CEO of EDX Markets, said in an interview: If the Bitcoin spot ETF is passed as expected, it is expected to bring incremental funds to the encryption market, which will in turn drive the currency price to break through the $32,000 barrier that has been unable to break through so far.
In a July interview with Fox Business, BlackRock CEO Larry Flink made a dramatic statement. Larry Flink said: “We believe that if we can create more tokenization of assets and securities like Bitcoin, it could revolutionize the financial industry.”
The pursuit of growth opportunities by institutional investors is now most evident in Bitcoin’s infrastructure: mining. The mining industry’s champions are signing deals and building at a breakneck pace, and the network hashrate continues to hit all-time highs.
Bitmain CFO Max Hua said at the Global Digital Mining Summit held on September 22 that as of June 30, 2023, 16 listed companies have controlled more than 30% of the Bitcoin computing power, and at the beginning of 2022, these companies accounted for about 20% Bitcoin computing power increased by 10%. It can be seen that the competition in the Bitcoin mining industry will become increasingly fierce and incompetent miners are being actively eliminated. In the future, the game will only be suitable for mining companies with huge financial potential and modern technology.
Although compared to other assets backed by BlackRock, investment coverage in the mining space is less shiny and exciting. But investing in Bitcoin mining companies is not only a bet on Bitcoin itself, but also supports and promotes a secure and energy-saving computing network, which is in line with the core principles and goals of Bitcoin.
Due to the increased accessibility of Bitcoin ETFs, coupled with the upcoming 2024 halving event, this will become an important indicator of the hype cycle of rapidly rising prices. While these types of market actions are often accompanied by speculation and panic, they bring in more capital and benefit those who make a real effort to participate in the mining industry.
The most important point is that Bitcoin mining companies are a core component of maintaining the security and operation of the Bitcoin network. They are responsible for mining new Bitcoins and validating transactions. The influx of institutional funds will provide these mining companies with more development opportunities and promote the construction and upgrade of Bitcoin infrastructure. Therefore, in the future, each institutional fund with a Bitcoin ETF will need to establish its own infrastructure, which will further enhance the security and stability of the Bitcoin network and provide support for the healthy development of the entire Bitcoin ecosystem.
Summarize
All in all, the significance of BlackRock's increased stake in Bitcoin mining companies is to promote institutional funds to enter the Bitcoin economy, enhance market confidence, catalyze the rise of Bitcoin prices, and support the construction of Bitcoin infrastructure. This is a positive development for the Bitcoin industry and helps strengthen Bitcoin’s legitimacy and sustainability.