BlackRock deposits $468 million into Coinbase Prime — Bullish or Bearish?

[Pandorak]

Just a few hours ago, one of the largest institutions, BLACKROCK through IBIT Bitcoin ETF and ETHA Ethereum ETF, made a deposit to Coinbase Prime:

• 1,885 $BTC ($213.68M)
• 59,606 $ETH ($254.45M)

https://intel.arkm.com/explorer/entity/blackrock

Positive Impact: 
This could be a breath of fresh air for the market, provided that these deposits are indeed intended for custody (secure storage for institutions), meaning the funds are only being transferred for security and liquidity purposes, or BlackRock may be preparing liquidity to support Bitcoin & Ethereum spot ETFs.

Negative Impact:
Triggering panic in the market, deposits into exchanges are typically interpreted as preparatory steps for selling, which could spark mass panic among investors and retail traders. Although BlackRock may not necessarily sell, the market often reacts emotionally, leading to panic selling that causes prices to drop significantly, with traders rushing to sell out of fear that prices will continue to fall.
 

[X-ray]

It just causes short term panic as from the market chart there's no significant dump so far. So, I think the market still consider this as just funds being transferred for something, nothing more like you outlined in the positive impact.

The people who are calling it preparation for sell are just speculating, no news about whether they are selling or not at all. Even both BTC and ETH is recovering right now.

[joniboini]

The people who are calling it preparation for sell are just speculating, no news about whether they are selling or not at all. Even both BTC and ETH is recovering right now.

Do companies like this announce whenever they sell or buy exactly at the time they do that? I can't remember. I'm sure Strategy announcing how many Bitcoin they bought after they bought them, not like we can verify them either. I think it's fair to speculate that way, as long as it doesn't turn into making your own narrative without any sufficient data. That will be gambling instead of a calculated trading position. CMIIW.

[adaseb]

Since its going from Blackrock to Coinbase it means there was net sellers on the ETF today and they had to take some shares out of circulation and they are sending it back to Coinbase so it can be sold OTC or on the exchange, its a little bearish.

Its opposite of when someone buys. They buy it on the stock market, and they get the shares but Blackrock in return needs to purchase those bitcoins from Coinbase and later it gets sent to their Blackrock holding address.

We hit a new ATH and price has stalled so people are taking profits I guess.

[crwth]

Currently, the fear & greed index is neutral, and based on the trading, it seems like the market is going to be sideways now. I do think that decisions like this from a big institution could impact the market, but we still have no historical comparison. Maybe if it came from MicroStrategy, we could analyze it, but there's still none.

I think the BASE narrative will come into play more, as it's positioning itself as a fundamental chain that consumers might want to engage with.

[BitGoba]

BlackRock is just an asset manager, and aside from institutions, ETF buyers and sellers are mostly regular retail investors.

As for Bitcoin, there’s no need to worry  it will continue to grow in the long run. In the short term, we may see some downside volatility, but due to inflation, its long term trend is always upward.

When it comes to Ethereum, it shouldn’t be held long term. It’s more of a short-term speculation, aimed at earning more Bitcoin or dollars

[Ambatman]

After getting used to billions of dollars moved or used,
millions of dollars feels a little small in impacting this sea.

This is an outflow, it means some investors are selling
which is nothing new and short term movement shouldn't influence your decision.

[Ziskinberg]

I think it’s neutral because Coinbase Prime is mainly a custody service for institutions. It shouldn’t have any direct impact on the market, and that’s why we still see the price going down even after hitting a new ATH recently.

For me it looks more like a way to balance risk, since Coinbase can secure the funds at the same time. About the figure you mentioned, I couldn’t find any news on the exact number, so I’d appreciate it if you can share the actual source (news) with the figure.

[PrivacyG]

Some times I wish Bitcoin had a private blockchain so there would be little to no despair when large moves are combing through the market.  Like I kept saying over the years, it looks like all the people who cheer for BlackRock and other giant corporations purchasing trainloads of Bitcoin never see the reality but only a dream.  The reality is that institutions are purchasing Bitcoin not to hold it to oblivion but to end up SELLING IT on profit one day.

To me, the positive and negative impacts are different.

Negative?  A .5 Billion sale could crash the market for probably a few minutes.  It could also psychologically impact people who thought BlackRock would be only purchasing all their existence and never sell.

Positive?  There are many.  Selling means more Bitcoin spread into multiple hands rather than one.  Selling also means institutions hold less manipulative power against the market.  If it happens on a profit, it also means Bitcoin has succeeded.  It means Bitcoin has done an institution enough profit that a sale is worth doing.  How many assets offer this opportunity so quickly?

[Solosanz]

@OP it's neither bullish or bearish, it's nothing.

BlackRock is using Coinbase as their custodian, they're just moving from their coins from one wallet to another wallet. What is this called? they only doing their job for entrusting their coins to Coinbase.

If they move the coins to other exchange, then it's a different discussion.

3. Integrated technology: IBIT is managed by the world’s largest asset manager and leverages a multi-year technology integration developed with Coinbase Prime, the world’s largest institutional digital asset custodian.2

Coinbase Prime is designed specifically for institutional investors, such as hedge funds, family offices, and asset managers.

[Zlantann]

@OP it's neither bullish or bearish, it's nothing.

BlackRock is using Coinbase as their custodian, they're just moving from their coins from one wallet to another wallet. What is this called? they only doing their job for entrusting their coins to Coinbase.

If they move the coins to other exchange, then it's a different discussion.

In a July 1 notice, Coinbase said the United States Marshals Service had selected the exchange’s institutional investing arm “to provide custody and advanced trading services” for large-cap digital assets. The cryptocurrency exchange said it would manage the assets “centrally in support” of the federal agency, which sometimes takes custody of crypto seized by the Department of Justice.

Coinbase also serves as a custodian to the US government. So there are possibilities that BlackRock was sending those coins for safekeeping. But since the company also offers exchange services, it is not out of place to suspect that BlackRock wants to sell those coins. Until there is a formal report from these organizations on the reason for the transaction, we will just keep speculating. 

[The Cryptovator]

Positive Impact: 
This could be a breath of fresh air for the market, provided that these deposits are indeed intended for custody (secure storage for institutions), meaning the funds are only being transferred for security and liquidity purposes, or BlackRock may be preparing liquidity to support Bitcoin & Ethereum spot ETFs.

If they deposit cryptocurrency like Bitcoin and Ethereum, then how do you think it's positive? I don't believe they made a deposit for custody; they should have their own cold wallet to secure their funds. Usually investors made a deposit into the exchange to liquidate their cryptocurrency. And such big institutions won't deposit without a reason, like selling their crypto. At least I don't believe they will store their funds in an exchange.

Negative Impact:
Triggering panic in the market, deposits into exchanges are typically interpreted as preparatory steps for selling, which could spark mass panic among investors and retail traders. Although BlackRock may not necessarily sell, the market often reacts emotionally, leading to panic selling that causes prices to drop significantly, with traders rushing to sell out of fear that prices will continue to fall.

Remember, they could sell their crypto when necessary. So definitely this would be a reason for a panic sale on the market, though we haven't seen any significant movement for that. Such deposits create a panic on the market, so whether they sell or not, the market will react accordingly when panic sellers start selling their holdings. I am not really positive about their deposit; rather, I am wondering if they are likely to sell their crypto for some reason.

[Darker45]

Your guess is as good as mine, but whatever. What's $213.68 million in Bitcoin, anyway? Even ^BTCStrategy could buy twice or thrice as that in just a day. That's not a big deal. A year ago, the German government sold billions worth of Bitcoin. It was gobbled up by the market. Months later, the price has more than recovered, and that decision of the German government has made them miss a multi-billion opportunity.

Whether it's for selling or not, I'm not the least worried.

[Don Pedro Dinero]

I think it’s neutral because Coinbase Prime is mainly a custody service for institutions. It shouldn’t have any direct impact on the market, and that’s why we still see the price going down even after hitting a new ATH recently.

For me it looks more like a way to balance risk, since Coinbase can secure the funds at the same time. About the figure you mentioned, I couldn’t find any news on the exact number, so I’d appreciate it if you can share the actual source (news) with the figure.

I agree. The impact, if any, must be very limited. Firstly because of the amount, and also because it is a custody service.

What I would like to know is what kind of measures these custody services take. I imagine they must be extremely careful, with multiple wallets, multisig systems, and perhaps other measures that neither we nor they will disclose.

[henry_of_skalitz]

Your guess is as good as mine, but whatever. What's $213.68 million in Bitcoin, anyway? Even ^BTCStrategy could buy twice or thrice as that in just a day. That's not a big deal. A year ago, the German government sold billions worth of Bitcoin. It was gobbled up by the market. Months later, the price has more than recovered, and that decision of the German government has made them miss a multi-billion opportunity.

Whether it's for selling or not, I'm not the least worried.

BTC has a cap of trillion sizes - what millions are to it, if we are talking only about buys and sells?

So I totally agree with you.

[free-bit.co.in]

The people who are calling it preparation for sell are just speculating, no news about whether they are selling or not at all. Even both BTC and ETH is recovering right now.

Do companies like this announce whenever they sell or buy exactly at the time they do that? I can't remember. I'm sure Strategy announcing how many Bitcoin they bought after they bought them, not like we can verify them either. I think it's fair to speculate that way, as long as it doesn't turn into making your own narrative without any sufficient data. That will be gambling instead of a calculated trading position. CMIIW.

I don't know how they can hide their bitcoin trading behavior but based on the law, what they do needs to be open and transparent. Because Blackrock is just an asset management company, meaning they are just an intermediary between investors and the market. So whenever an investor makes a trade, they need to take corresponding actions.

Likewise, Strategy will need to clearly disclose its transactions since it is using shareholders' and investors' money to buy bitcoin. Additionally, all financial institutions are regulated by the SEC and any actions they take must comply with SEC regulations. In particular, regulations related to anti-money laundering, so transactions need to be made public is mandatory.

[FortuneFollower]

It just causes short term panic as from the market chart there's no significant dump so far. So, I think the market still consider this as just funds being transferred for something, nothing more like you outlined in the positive impact.

The people who are calling it preparation for sell are just speculating, no news about whether they are selling or not at all. Even both BTC and ETH is recovering right now.

Fuzz and buzz, if we are speaking in broader terms.

Funds are moving every day, and in bigger quantities too

[retreat]

Many people interpret this as a sell-off by BlackRock, but so far market sentiment remains quite positive. In fact, the price of Bitcoin has rebounded from $112k to $115k, indicating some buying activity from investors, and that possibility will continue to increase. This may also be driven by the possibility of interest rate cuts by the Fed, which is supporting Bitcoin’s price. With that, I don't think we will head towards bearish.