IBIT, Strong Momentum, Bullish Narrative, But Watch Out For This

Summary IBIT is an ETF structured as a passive Bitcoin custody vehicle with low fees (0.25%) and secure, segregated cold storage, which I consider among the top in the market. The narrative driving Bitcoin’s price is anchored to the process of regulation and institutionalization, which began with ETFs and is now potentially continuing with Bitcoin as a strategic national reserve. The concept of “strengthening american leadership in digital financial technology” is fueling rumors that shouldn’t be ignored, and on which the market seems to be building a bullish outlook. On a practical level, the inverse correlation with the dollar and the potential beginning of one with gold support this narrative. It remains important, in my view, not to base the investment on rumors, given the high political uncertainty, but to maintain an adaptive approach. When I first approached Bitcoin back in 2014, I never imagined that less than ten years later it would be possible to buy it through funds like IBIT. And yet here we are, what once seemed impossible has become reality. I begin this research with that thought, because I believe it highlights how almost everything seems impossible until it happens, and in financial markets, it often makes sense to “expect the unexpected.” Especially today, as Bitcoin is at the center of a true process of mainstream adoption, even encouraged by the Trump administration, which has chosen to use it as a strategic national reserve. That possibility becomes even more tangible when we look ahead, even just by considering recent signals from the U.S. government, about a potential “monetary system” based on stablecoins. I’d like to use this emerging narrative, one we’re hearing more and more about, to revisit one of the most common intermarket analyses involving Bitcoin (its relationship with the dollar and gold), and use that as a foundation to introduce my rating on what I believe is one of the best ETFs in the space: IBIT. Data by YCharts Why IBIT? IBIT is an ETF managed by BlackRock, listed on the NASDAQ, but not registered or regulated by the CFTC (so it’s not considered a commodity pool), a key detail that, in my view, means it should be technically classified as a passive Bitcoin custody vehicle. But yes, it’s an ETF in the sense that it’s a passive investment instrument, with no trading or secondary management. Its sole purpose is to track the price of Bitcoin , net of fees and operating costs. Currently, those costs amount to 0.25%. IBIT’s Bitcoin custody is handled through Coinbase Custody , in segregated cold storage, and the fund clearly states that no speculative operations are conducted with the BTC held, for example, the assets are not used as collateral elsewhere (this may sound obvious, but it isn’t), and that marks a major difference compared to extreme cases like FTX (just to illustrate the point). In short: the asset truly belongs to the trust. Transactions are carried out by Authorized Participants (APs), but without directly handling BTC, they do it through third-party execution, such as Coinbase Prime. I consider it a competitive solution. If I had to make a selection, I’d definitely place it among the top Bitcoin ETFs, alongside BTC ETF. (I talked about this in more detail here , and if you come across it, the comment section also sparked an interesting discussion.) Profile (Seeking Alpha) What’s happening to the price of Bitcoin In an administration like Trump’s, terrified of the dollar and high interest rates, and strongly attracted to the crypto market, whether for political reasons or actual financial motives, how might Bitcoin react to market stimuli? To answer, I’ll start with the context: The prevailing narrative, according to which Trump might use stablecoins as a strategic pillar to maintain dollar dominance while simultaneously increasing commercial advantage, seems to appeal to Bitcoin (even if, in the end, it’s “little more than a rumor”). However, crypto has in fact reached some “institutional” milestones: starting with the launch of ETFs, such as IBIT, and even Bitcoin entering government accounts, with BTC as a “strategic national reserve.” Therefore, the strategic introduction of dollar-pegged stablecoins may not be so “theoretical.” And I think this glimmer of possibility is the narrative currently driving the crypto stream, because in the end, stablecoins have always been a strong bridge of connection with the traditional market. That said, today we hear talk of a “new Bretton Woods,” a kind of banking “wild west” tied to the use of these stablecoins. These, indeed, are rumors, but since there’s still a lot of media speculation, I’d now like to move directly to intermarket analysis to try interpreting the market through this perspective. Gold-Dollar-(Bitcoin?) Following an intermarket logic, it’s still interesting to observe how certain forces are forming that align with this narrative. The weakness of the dollar has in some way played a positive role for Bitcoin, even while the S&P 500 was falling , and usually, when the market shifts from risk-on to risk-off, Bitcoin has followed suit. Data by YCharts A second element is a potential de-correlation with gold . I say potential because it’s a recent development that could be just emerging, but even in this sense, it seems to follow the narrative described in the previous paragraph: a kind of digitalization of the real asset, and ultimate safe haven, gold. Data by YCharts Risk I don’t know whether the Trump administration will continue in this direction; but continuing down this path would, in my opinion, be an event the market would interpret positively, and I believe this can be read between the lines of the intermarket analysis. Since it’s an open and widely debated issue, I think it will likely be revisited during upcoming developments. Naturally, this is a highly debatable point of view. Moreover, with the back-and-forth on tariffs, the Trump administration could increasingly lose credibility in the eyes of the market . This is a risk, because it could easily make a U-turn from the steps taken so far, generating significant discontent among market participants and fueling bearish speculation, so it is indeed a risk. Personally, however, I believe that even if we were blind to political developments, we still would have observed a relative strength in Bitcoin from a technical perspective, one that would have been hard to ignore. Data by YCharts Conclusion As an active investor, I try to follow the market’s underlying narrative and adapt accordingly. At this moment, in my view, the institutionalization and regulation of the crypto market are strong driving forces, and so are the rumors surrounding a stablecoin-based monetary system. I see all of these as bullish elements that, combined with the underlying upward momentum, reinforce this outlook. However, considering the high level of political uncertainty and the market’s growing skepticism toward the current administration’s political statements, I believe a fair rating for IBIT is HOLD.

Source: Seeking Alpha