Source: Blackrock; Compiled by: Deng Tong, Golden Finance
Abstract
Bitcoin is the world's leading crypto asset, and its adoption has been rapid, attracting the attention of individual and institutional investors.
Traditionally, investing directly in Bitcoin has faced many obstacles, such as opening a new account, potentially high transaction fees, and dealing with security challenges.
IBIT provides convenient access to Bitcoin investment through a familiar and common investment tool, ETF.
Bitcoin is the world's leading and most widely used crypto asset, with a market capitalization of nearly $2 trillion. Bitcoin's global and decentralized nature makes it likely to be seen as a global currency alternative, which could benefit from geopolitical disorder and declining trust in institutional and government-issued fiat currencies. Investors have taken notice, and both institutions and individuals are adding Bitcoin to their financial assets. Until now, however, investing in Bitcoin has often presented investors with a number of hurdles, including the need to open new accounts, face high transaction fees, and deal with security challenges. But just as ETFs have provided millions of investors with an efficient way to access previously inaccessible markets such as gold and international stocks, IBITs now allow investors to invest in Bitcoin in a convenient way.
Bitcoin’s Rapid Adoption
Since its launch in 2009, Bitcoin has gained popularity even faster than other breakthrough technologies such as the internet and mobile phones. Several factors have accelerated this adoption, including:
Demographic Patterns:Younger generations are more likely to be considered “digital natives,” and therefore more inclined to adopt Bitcoin than Generation X and Baby Boomers.
Global Changes:Certain trends such as inflation concerns, global political divisions, and banking and fiscal issues have increased Bitcoin’s resonance as a decentralized asset.
The Future of Finance:Finally, the ongoing digital transformation of the global economy is changing the world of finance, with the maturation of digital asset infrastructure lowering barriers to entry and creating new use cases for Bitcoin.
Figure 1: Crypto asset adoption has outpaced the growth of mobile phones and the internet
Time to 300 million users
The first cellular mobile phone was put into use in 1973. Source: NPR, Our World in Data. January 1, 1983 is considered the official birth date of the Internet. Source: University System of Georgia, Our World in Data. The initial price of Bitcoin was set in 2010. Source: Bloomberg, Cambridge Center for Alternative Finance, Crypto.com.
Chart Caption: Bar chart showing the time it took for cryptocurrency, the Internet, and mobile phones to reach 300 million users since their inception. Cryptocurrency reached 300 million users faster than the Internet and mobile phones.
3 Reasons IBIT Can Change the Bitcoin Investing Landscape
Despite Bitcoin’s growing adoption, investing directly in Bitcoin presents unique complexities for investors. That’s why we launched IBIT (iShares Bitcoin ETF) to make investing in Bitcoin easier for everyone.
We believe IBIT can be a game changer for investors for the following reasons:
Access:IBIT allows you to access Bitcoin exposure within a traditional brokerage account. As an ETF, IBIT provides Bitcoin exposure but trades similarly to stocks. As such, it can be traded through traditional brokerage platforms alongside other investments such as stocks, bonds, and other ETFs – both through taxable and tax-advantaged accounts such as TFSAs.
Convenience:IBIT can help reduce the complexity for investors to gain Bitcoin exposure. Purchasing Bitcoin directly typically requires opening a new account on a cryptocurrency exchange or with a select online broker. To ensure their Bitcoin is as secure as possible, investors typically need to set up their own custodial arrangements outside of a cryptocurrency exchange, which can be costly and risky. IBIT can help minimize these unique cryptocurrency barriers through a familiar and common investment vehicle – an ETF.
Integrated Technology:IBIT is managed by the world’s largest asset manager and leverages years of technology integration developed with Coinbase Prime, the world’s largest institutional digital asset custodian.
Conclusion: IBIT Opens a New Era of Bitcoin Investing
The advent of a Bitcoin ETF marks an important milestone for both digital assets and traditional markets. The launch of IBIT stems from iShares’ commitment to providing access to make Bitcoin accessible to more investors through the convenience, efficiency, and familiarity of an ETF.