According to Michael Shaulov, CEO and co-founder of Fireblocks, an approved BlackRock spot Bitcoin exchange-traded fund (ETF) will bring in new institutional money to Bitcoin, but it will be the retail investors who will ultimately drive significant price surges.
Shaulov made these observations during the Australian Blockchain Week, highlighting that institutional involvement in crypto may not necessarily lead to skyrocketing prices.
Shaulov pointed out that even during the mid-2020 period when there were massive inflows of institutional money, the prices didn’t see significant appreciation until retail investors fervently embraced crypto assets later in the year.
The institutions were acquiring Bitcoin slowly and utilizing algorithms that wouldn’t drive up the market.
On the other hand, retail investors, who participate in a less sophisticated manner, were responsible for dramatic price movements, with 50% increases attributed to them.
However, Shaulov acknowledged that the finite supply of Bitcoin meant that any large-scale accumulation of the cryptocurrency would ultimately impact its price.
He believed it would be easier for institutions currently not participating in the market to add Bitcoin to their allocation due to its unique properties.
Shaulov also discussed the various narratives surrounding Bitcoin among institutional investors.
He mentioned that the narrative surrounding Bitcoin is still unfolding for these institutions. Is it a hedge against inflation? Is it a public reserve currency? Is it a hedge against government financial misdealings? Shaulov personally views Bitcoin as the “ultimate insurance asset.”
He emphasized that Bitcoin possesses properties that make it valuable in times of crisis.
It is disconnected from governments, digitally native, and easily transferable.
Shaulov concluded by stating that the specific value of Bitcoin at any given point, whether it’s $15,000, $20,000, or $60,000, is not as crucial as having enough of it to survive challenging periods.
In his opinion, Bitcoin serves as a reliable asset in times of uncertainty and can provide a safeguard against adverse economic conditions.
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