BlackRock issues a warning about Bitcoin supply shock, suggesting there is not enough BTC to cater to the demands of U.S. millionaires.
The leading asset manager made this known in a report titled, ‘Why Bitcoin? A Model Portfolio Builder’s View.’
The report, written by BlackRock analysts Michael Gates and Brett Wager, provided insights into Bitcoin-related topics, including its volatility, compelling value proposition, and scarcity.
BlackRock Highlights Bitcoin Scarcity Feature
According to BlackRock, Bitcoin has a ‘monetary policy’ that makes it inelastic to demand. Unlike gold, this initiative makes it impossible to increase Bitcoin’s supply to meet extra demand.
Notably, it emphasized that Bitcoin has a max supply of 21 million coins, with 19.83 million BTC currently circulating. The remaining coins are programmed to be issued until 2140.
Even though 21 million BTC represents Bitcoin’s theoretical limit, BlackRock suggested that the actual available supply is much lower. Specifically, it estimated that up to 4 million Bitcoins are permanently inaccessible due to lost or forgotten private keys.
To illustrate Bitcoin’s extreme scarcity, the asset manager noted that if every U.S.-based millionaire requests a minimum of one BTC, there will not be enough BTC to meet these demands.
“If every United States millionaire asked their financial advisors to acquire 1 BTC on their behalf, there would not be enough,” an excerpt from the report read.
Bitcoin’s inelastic supply reinforces the asset’s scarcity and potential as a store of value amid growing economic uncertainties.
BlackRock Sets $700K Target For Bitcoin
Meanwhile, BlackRock has remained confident about Bitcoin’s potential. Its CEO, Larry Fink, predicted that sovereign wealth funds could drive the BTC price to $700,000, a surge of 697% from the current price of $87,811.
BlackRock’s iShares Bitcoin Trust ETF (IBIT) offering has brought the asset manager closer to the premier cryptocurrency. The ETF, which launched in January 2024, saw a record outflow of $1.17 billion last week.
Notably, the outflow continued this week, with $78 million pulled from the ETF on Monday. The fund did not record any inflows or outflows yesterday.
Despite the massive withdrawal, the BlackRock IBIT fund remains the largest Bitcoin ETF globally. It boasts an AUM of $39.62 billion, with an IBIT share priced at $49.39 at press time.
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