Bitcoin Rallies After U.S. Rate Cut While BlackRock Wants to Tokenize Its ETFs

In line with expectations, Fed Chairman Jerome Powell announced a rate cut this week, which sent the price of Bitcoin north of $117,000 this morning. 

There’s also some news from BlackRock on the tokenization front, and the Spot Bitcoin ETFs are having a good run these past few weeks.

Here’s what happened the last two weeks…

TL;DR

• Fed Chairman Jerome Powell announced a rate cut of 25 basis points to 4.25%, which sent the price of Bitcoin higher.

• BlackRock wants to tokenize its ETFs, building on the success of its tokenized BUIDL fund.   

• Spot Bitcoin ETFs recorded four consecutive net inflow weeks with a $2+ billion week in September. 

The Fed Cut Rates, Nudging Bitcoin Higher 🚀

For the first time in over nine months, the Fed has lowered the federal funds target range by 25 basis points to 4.00%–4.25%.  

The Committee's official statement said: "Job gains have slowed, and the unemployment rate has edged up but remains low… it seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated." 

Jerome Powell also said that they will closely monitor the situation and don't have to move quickly. According to him, the Fed is shifting its focus to the labor market and is trying to keep inflation under control. 

Bitcoin reacted positively to the announcement, increasing by 1.8% and briefly hovering around $117,950 before correcting to $117,200 in the early European morning hours. 

BlackRock Wants to Tokenize Its ETFs 👀

BlackRock's spot Bitcoin ETF has been one of the biggest success stories on Wall Street. It has broadened Bitcoin’s investor base and has helped change the digital currency's perception among institutional investors. 

What’s more, it also convinced one of the most prominent former Bitcoin skeptics, Larry Fink, to reconsider his view on the world of digital assets and tokenization. 

Based on the success of the Bitcoin ETF (IBIT), BlackRock is now considering tokenizing its ETF product on the blockchain and further enhancing the technology's capabilities. 

The company already has a tokenized money-market fund, called BUIDL, which grew to over $2 billion in assets under management.  

We'll wait and see how quickly they can move with other ETFs and whether they will also offer a tokenized approach to the spot Bitcoin ETF. 

I'll be eager to see how quickly BlackRock moves here and if we will soon be able to buy, hold, and exchange IBIT shares in our own crypto wallets.  

Spot Bitcoin ETFs recorded another $2+ billion week 👀

Speaking of ETFs and their success, September has been another excellent month for net inflows into spot Bitcoin ETFs so far. 

While the Bitcoin price experienced its share of fluctuations this month, ranging from $109,000 to $117,900, there was a notable interest from ETF investors. 

In the week of September 12, the spot BTC ETFs recorded a net inflow of over $2.43 billion, making it one of the best weeks since July. 

Furthermore, we can see four consecutive weeks of constant net inflow, which suggests that ETF investors as a whole continued to allocate to Bitcoin, despite the price swings.  

Your fellow stacker in Sats, 

Patrick Lowry

Disclaimer: The opinions expressed in this newsletter are solely those of the author and do not necessarily represent the views of any associated company. This newsletter is for educational and informational purposes only and should not be construed as investment, financial, or any other professional advice. Investing in cryptocurrencies is highly speculative and carries a significant risk of substantial financial loss, so you must conduct your own thorough research and consult with independent professional advisors before making any decisions.