How BlackRock’s ‘rich boomer money’ will change crypto

Eric Balchunas expects the SEC to approve applications for spot Bitcoin ETFs by mid-January.
The Bloomberg Intelligence analyst explains why he's more excited about the merging of high finance and crypto.
He spoke to DL News about his role as an "interpreter" for the online crypto community.

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Happy Monday! Joanna here.

Eric Balchunas’ excitement is infectious.

”BlackRock is like Godzilla. It’s changed the game,” he told me and Trista Kelley.

We talked to Balchunas, a Bloomberg Intelligence ETF analyst, about BlackRock’s pending Bitcoin exchange-traded fund, and his new status as Twitter’s go-to pundit.

BlackRock is by far the world’s largest asset manager, with $9 trillion under management.

When the firm applied for a spot Bitcoin ETF in June, it ignited excitement among Bitcoin investors, and set off a flurry of 11 other applications.

Coming out of a crypto winter and post the FTX scandal, every Bitcoin degen wants a little hopium, and BlackRock has the heft to bring investors to the product.

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Balchunas says the SEC will start approving spot Bitcoin ETFs in the near future — by mid-January.

The real excitement for him, though, is less about the ETFs themselves and more about what they represent: Wall Street’s gradual acceptance of crypto.

”These worlds have been trying to connect for 10 years. And they’re just getting so close, they’re like right there!” he said.

Balchunas said he’s become a kind of interpreter between those two worlds, communicating the intricacies of finance and regulation to an excitable cabal of online crypto enthusiasts.

With markets on tenterhooks waiting for the good news, there’s a lot of disinformation flying around for him to debunk.

In October, fake news that the SEC had approved BlackRock’s application saw the price of Bitcoin surge briefly.

And this month, a fraudulent filing suggesting that BlackRock was seeking approval for an XRP ETF sent the price of the Ripple-linked token soaring.

Balchunas is aware that crypto investors’ hunger for good news has driven his new pundit status. But he’s nevertheless tempered in his expectations for the future of the ETFs.

He told us the excitement will inevitably level out once the SEC makes its first approvals. And the uptake of Bitcoin spot ETFs will be a slow burn rather than an initial feeding frenzy.

When ProShares launched BITO, its Bitcoin futures ETF, in October 2021, he said, it launched in the middle of a bull market and into “a kind of mania” that drove demand.

Spot ETFs won’t see that kind of crazed uptake, he said, but there will be bigger fish lurking with more money to invest — “large investors who manage rich boomer money,” he said.

”Those are not the kind of people to go crazy on day one. They will take their time [and suss out] which ones’ going to be more liquid, who’s the cheapest, what’s the biggest brand name — they’re going to sniff around a little bit,” Balchunas said.

”And then finally chomp on the bait that is best for them.”

Look out for our full interview with Balchunas on DL News.

Got a hot tip or burning opinion on crypto regulation? Email me at joanna@dlnews.com or TG @joannallama.