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NIKOLAUS: Retail Keeps Selling Bitcoin to ETFs, Don't Sell Your BTC To Whales

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3 months ago

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What We’re Reading: HODL15Capital

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For the past few weeks I have been keeping up with HODL15Capital on X, who has done a tremendous job at posting some of the quickest incoming market data regarding the U.S. spot Bitcoin ETFs. Recently, there have been two charts in particular he has posted that have caught my eye.

Nine months ago, the SEC approved spot Bitcoin ETFs for trading, and since then, the ETFs have seen huge inflows during eight out of those nine months. Since their inception, these ETFs have seen inflows of 312,488 BTC while miners have only created 169,942 new bitcoin.

These ETFs have been the fastest growing ETFs in history, like BlackRock CEO Larry Fink stated, with no real signs of slowing down, especially as we head into a period of time that has been historically bullish for Bitcoin. 

These ETFs are gobbling up all the available BTC leaving many thinking: Who could possibly be selling right now? And according to HODL15Capital, it appears to be smaller BTC holders, selling directly into the hands of the ETFs and institutions.

We’re seeing state pension funds, large institutions, wealthy investors and other major players buy and hold shares of these ETFs. Even ETF issuers like BlackRock are buying shares of its own Bitcoin ETF for their other funds. Long story short, I’m seeing smart money pouring into this asset class and, while that is great for the price of BTC, it pains me to watch smaller holders sell their bitcoin directly to the institutions.

Holding Bitcoin over the long term has been proven to be one of the best ways to build wealth. This is a real chance for those interested in investing for their future, who may not currently have proper savings, to start building up wealth in a sovereign way by accumulating BTC and holding the keys to their coins. Instead, these coins are being mostly “locked up” in these ETFs, where those who buy them can only redeem their shares for US dollars and don’t experience the benefits of the attributes that make bitcoin so unique (e.g, freedom to transact globally without permission from a third party).

Based on this data, I fear many of these smaller bitcoin holders are letting a great opportunity to build wealth via holding BTC slip through their fingers. Also, buy not buying bitcoin directly and holding it in self-custody, as opposed to purchasing shares of the ETFs, investors are missing out on what it truly means to own censorship resistant sovereign money. Such a feeling often has the effect of making investors hold bitcoin for the long-term as opposed selling in the short-term based on fear.

The smart money knows exactly what opportunity is here, and they don’t care too much about the freedom aspects of Bitcoin. They’re just filling their BTC bags in a vehicle that suits them better. 

Cheap BTC does not last forever. Major players will continue scooping up huge swaths of shares of the ETFs as we hit a new all time highs and beyond. If there’s one thing I leave you with today: Don’t sell your BTC to the corporations, and hold the keys to your coins.





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21 Million

No, BlackRock Can't Change Bitcoin

Published

2 days ago

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December 21, 2024

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Recently, BlackRock released an educational video explaining Bitcoin, which I thought was great—it’s amazing to see Bitcoin being discussed on such a massive platform. But, of course, Bitcoin X (Twitter) had a meltdown over one specific line in the video: “There is no guarantee that Bitcoin’s 21 million supply cap will not be changed.”

HealthRnager from Natural News claimed, “Bitcoin has become far too centralized, and now the wrong people largely control its algorithms. They are TELLING you in advance what they plan to do.”

Now, let me be clear: this is total nonsense. The controversy is overhyped, and the idea that BlackRock would—or even could—change bitcoin’s supply is laughable. The statement in their video is technically true, but it’s just a legal disclaimer. It doesn’t mean BlackRock is plotting to inflate bitcoin’s supply. And even if they were, they don’t have the power to pull it off.

Bitcoin’s 21 million cap is fundamental—it’s not up for debate. The entire Bitcoin ecosystem—miners, developers, and nodes—operates on this core principle. Without it, Bitcoin wouldn’t be Bitcoin. And while BlackRock is a financial giant and holds over 500,000 Bitcoin for its ETF, its influence over Bitcoin is practically nonexistent.

Bitcoin is a proof-of-work (PoW) system, not a proof-of-stake (PoS) system. It doesn’t matter how much bitcoin BlackRock owns; economic nodes hold the real power.

Let’s play devil’s advocate for a second. Say BlackRock tries to propose a protocol change to increase bitcoin’s supply. What happens? The vast network of nodes would simply reject it. Bitcoin’s history proves this. Remember Roger Ver and the Bitcoin Cash fork? He had significant influence and holdings, yet his version of bitcoin became irrelevant because the majority of economic actors didn’t follow him.

If Bitcoin could be controlled by a single entity like BlackRock, it would’ve failed a long time ago. The U.S. government, with its endless money printer, could easily acquire 10% of the supply if that’s all it took to control Bitcoin. But that’s not how Bitcoin works. Its decentralized nature ensures no single entity—no matter how powerful—can dictate its terms.

So, stop worrying about BlackRock “changing” Bitcoin. Their influence has hard limits. Even if they tried to push developers to change the protocol, nodes would reject it. Bitcoin’s decentralization is its greatest strength, and no one—not BlackRock, not Michael Saylor—can change that.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.



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Bitcoin

BlackRock’s New Bitcoin Ad Is A Monumental Paradigm Shift

Published

5 days ago

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December 19, 2024

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Yesterday, BlackRock released a new video aimed at educating people interested in Bitcoin on the asset class.

The video is quite good, honestly. I think they took inspiration from Saifedean Ammous’ book “The Bitcoin Standard,” which discusses the history of money from the beginning of time and how it has changed and evolved throughout history.

Seeing this type of educational Bitcoin content from a $11.5 trillion asset manager is something that I think will really resonate with their target audiences.

Watching the video, there was one moment in particular that stood out to me. BlackRock was highlighting where Bitcoin is today and said, “Bitcoin is no longer seen as the radical idea it was 15 years ago. Over 500 million people around the world now use cryptocurrency, with over 50% holding or investing in Bitcoin.”

That right there screams to me that Bitcoin is becoming recognized as a legit and established asset class in the eyes of the financial elite, and then eventually the mainstream.

In the early days, Bitcoin really was such a radical new idea that probably 99% of people could not conceptualize. However, over time, Bitcoin has proven itself time and time again to be a legit asset and people are now interested in embracing this new form of money. It feels like there has been a sincere paradigm shift and that we are slowly, but surely, leaving the point in history where the majority of people think Bitcoin is a scam and bad for any other generic FUD that has already been thoroughly debunked.

With that being said, I’m not saying everyone is on the verge of becoming a bitcoin maximalist or anything, but I do think that more and more people are becoming accepting to the fact that Bitcoin is here to stay and that it’s not going anywhere — which I would think eventually leads to people saying “I should probably own some bitcoin then.”

This isn’t just anyone saying Bitcoin is becoming a legit asset, this is the world’s largest asset manager. BlackRock is putting their reputation behind Bitcoin and projecting confidence in the long-term success of it. And so far it has been an amazing play by them embracing Bitcoin, with their spot Bitcoin ETF being the most successful ETF launch in history.

When they speak highly of a potentially profitable investment, people listen. I think in particular, the wealthy and accredited investors are the first to take notice and advantage of BlackRock’s signalling here. Eventually this will be followed by retail investors.

I believe Bitcoin is set to enter an entirely new paradigm unlike anything we’ve seen before.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.





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Bitcoin

Put Options for BlackRock’s Bitcoin (BTC) ETF at $30, $35 See High Volume – What’s Happening?

Published

1 week ago

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December 16, 2024

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Surging volumes in put options linked to BlackRock’s Nasdaq-listed spot bitcoin ETF (IBIT) could be interpreted as bearish sentiment. That’s not necessarily the case.

On Friday, more than 13,000 contracts of the $30 out-of-the-money (OTM) put option expiring May 16 changed hands as the ETF rose 1.7% to $57.91, according to data from Amberdata. Volume in the $35 put option expiring Jan. 16, 2026, topped 10,000 contracts.

Most of the activity probably stems from market participants looking to generate passive income through “cash-secured put selling” rather than outright purchase of the options as bearish bets, according to Greg Magadini, Amberdata’s director of derivatives.

A put seller, offering insurance against price drops in return for a premium, is obligated to purchase the underlying asset at a predetermined price on or before a specific expiration date. (That’s opposed to the buyer of the put, who has the right but not the obligation to sell the asset.)

That means savvy traders often write OTM puts to acquire the underlying asset at a lower price while pocketing the premium received by selling the put option. They do so by continuously maintaining the cash required to purchase the asset if the owner of the put option exercises their right to sell the asset.

Hence, the strategy is called “cash-secured” selling of puts. In IBIT’s case, sellers of the $35 put expiring in January 2026 will keep the premium if IBIT stays above that level until expiry. If IBIT drops below $35, the put sellers must buy the ETF at that price while keeping the premium received. The sellers of the $30 put expiring in May next year face a similar payoff scenario.

“The $35 Puts for Jan 2026 traded +10k contract with an IV range of 73.52% to 69.94%, VWAP at 70.75% suggests net selling from the street… potentially Cash Secured put selling flows (for traders who missed the rally),” Magadini said in a note shared with CoinDesk.

IBIT options volume on Friday. (Amberdata)

IBIT options volume on Friday. (Amberdata)

Saxo Bank’s analyst suggested cash-secured put selling as the preferred strategy in Nvidia early this year.

Calls are pricier than puts

Overall, IBIT call options, which offer an asymmetric upside to buyers, continue to trade pricer than puts.

As of Friday, call-put skews, with maturities ranging from five to 126 days, were positive, signaling relative richness of implied volatility for calls. The bullish sentiment is consistent with the pricing in options tied to bitcoin and trading on Deribit.

On Friday, IBIT recorded a net inflow of $393 million, representing the majority of the total inflow of $428.9 million across the 11 spot ETFs listed in the U.S, according to data tracked by Farside Investors.

IBIT call-put skews. (Amberdata)

IBIT call-put skews. (Amberdata)





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