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Eric Balchunas, a senior ETF analyst at Bloomberg, has revealed that BlackRock has conducted $3 billion worth of portfolio trades involving Bitcoin Exchange-Traded Funds (ETFs). These trades involve large holders of Bitcoin, commonly referred to as 'whales,' who are converting their physical Bitcoin into ETF shares to take advantage of various benefits offered by traditional finance.
The concept, known as custom creations, is gaining traction, especially among major investors looking for flexible trading options akin to those in the bond market. This development underscores the increasing intersection of cryptocurrency assets and traditional financial markets, as investors seek more streamlined and potentially lucrative trading mechanisms.
The emergence of custom creations within cryptocurrency ETFs highlights a broader trend of convergence between innovative financial products and established market frameworks. Similar dynamics have been observed in the dramatic rise of the Rigetti Computing ETF, where compounding effects drove significant investor momentum. Additionally, structural shifts—such as the acquisition of CRSP by Morningstar—underscore the growing influence of index strategies on ETF performance and investor positioning across asset classes.