The Illiquid Bitcoin Market Is Being Shock Bid Higher - Unlike Silver Which Is Diluted Lower With Selling Of Virtual Metal

Is Blackrock Driving Bitcoin Higher?

In August 2019, Blackrock Inc.’s CEO Larry Fink joined the increasingly infamous World Economic Forum (WEF) as stated on the WEF’s website :

Consider the following from the WEF:

Blackrock is the world’s largest asset manager managing $11.5 trillion (T) of client assets.

Does anyone find it unusual that the CEO of the world’s largest asset manager belongs to an organization that has produced material claiming “You’ll own nothing. And you’ll be happy.” ? You will own no assets - and you’ll be happy. Hello? Anyone?

Blackrock In The Silver And Bitcoin Markets

Blackrock runs the world’s largest Exchange Traded Fund (ETF) iShares Silver Trust (‘SLV’-NY) that states it holds 474 million (M) oz. of silver in trust for its shareholders. That is 62% of all silver ETF holdings globally.

Blackrock also operates the world’s largest Bitcoin (BTC) ETF (‘IBIT’-NY), started in early 2024, that has grown rapidly to now hold 521,164 BTC of 19,898,162 BTC that are extant today.

On December 4, 2024 this Substack noted the words of warning of renowned fund manager John Paulson of Paulson Funds:

“I would describe cryptocurrencies as a limited supply of nothing. …

… There is no intrinsic value to any of the cryptocurrencies except that there is a limited amount.

Once the exuberance wears off, or liquidity dries up, they will go to zero. I wouldn’t recommend anyone invest in cryptocurrencies.”

Let’s compare silver and BTC as assets.

It should be noted that in less than 12 months the IBIT ETF has accumulated 2.6% of all BTC extant as of this date.

Further, IBIT’s 521,164 BTC accumulated in less than 12 months is at a pace of 160% of all BTC to be ‘mined’ this year.

In comparison, the SLV ETF has accumulated, over an 18 year period, 474M oz. of silver which is 1.9% of above ground silver stocks or, in total, just 58% of silver to be mined this year.

Figure 1 - SLV Holdings (Light Green) Over Time In Comparison To Other ETFs And Exchanges; source: GoldChartsRUs.com

The Impact of Blackrock Stepping Into The BTC Market

Bitcoin holding are extremely concentrated with approximately 92.5% of all BTC in existence held by just 1.86% of all wallet addresses.

Further, bitcoin investors have faced technical hurdles to directly acquiring bitcoin and have not had highly liquid and well known asset managers such as Blackrock allowing easy investment access to this space - until now.

This highly concentrated ownership of BTC, the slow BTC mining rate, and prior access barriers to BTC investment imply that the entrance of Blackrock’s IBIT shock buying volume appears to have had a material impact on the price of BTC. BTC has seen a 132% rise in the price of BTC since early February 2024. The BTC market has gone ape.

Figure 2 - Bitcoin 2024 Price Chart; source: TradingView.com

Comparing The Silver Market To BTC’s Market

Silver’s market price has been much more laconic and that should be no surprise.

First, with an estimated 4.2B oz. to 6.4B oz. of silver sold in the form of immediate delivery promissory notes into the London cash/spot market compared to an estimated 2B oz. of global silver bullion holdings (most of which is not immediately available to market) creating an obvious suppressive force on the price of silver - so long as metal delivery is not demanded.

And recall that London silver delivery is in the form of 1,000 oz. bullion bars. Global silver refinery capacity is just not available to quickly convert other forms of silver, if they were even available for rapid sale, into 1,000 oz. bars should a material amount of the spot claim holders in London demand delivery.

Second, Jeff Currie, Goldman Sachs’ former Global Head of Commodity Research, has made a disturbing claim that some silver ETFs short their clients silver bars (perhaps many times each) into the market artificially increasing apparent silver supply and thus suppressing the silver price.

Unlike BTC which is closely held and not widely sold into the market in the form of promissory notes or (that we know of) sold by ETFs without informing their client shareholders, silver appears to have several artificial and virtual supplies that artificially suppress silver’s price.

In comparison, especially with Larry’s Blackrock IBIT ETF entering the comparatively illiquid BTC market, suddenly shocking the price of BTC higher appears to this writer to have been like shooting fish in a barrel.

The BIG Question

The BIG question to be asked is this : are investors being led into an investment black hole by overwhelmingly driving the price of BTC suddenly higher to initiate a BTC/crypto mania in an asset class that John Paulson has warned will go to zero.

If John Paulson is right, the BTC crypto and BTC ETF ‘hodlers’ will be left with nothing in the end when the structured mania subsides- and they bloody well won’t be happy.

Best regards,

David Jensen