Bitcoin has climbed along with stock markets over the last week as traders cheer a potential peace deal with Iran (and bet on an imminent Wall Street game-changer).
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The bitcoin price has surged toward $70,000 per bitcoin, up from lows of under $60,000 earlier this month, as Elon Musk triggered extreme market volatility.
Now, as traders brace for a fresh BlackRock bombshell, the asset manager’s global fixed income chief investment officer, Rick Rieder, has said up to $9 trillion of funds are about to be redeployed.
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BlackRock chief executive Larry Fink has helped power the bitcoin price boom since early 2024.
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“There is so much cash that’s sitting on the sidelines,” Rieder, who once said bitcoin is close to replacing gold as a global safe haven, told Bloomberg, pointing to SpaceX’s record-breaking initial public offering (IPO) creating market momentum that has accelerated on hopes that the U.S.-Iran peace deal will remove a major geopolitical risk factor.
“Once that has happened, all of a sudden it unlocks this cash, particularly when you get a good piece of news and people say, ‘gosh, I can get into the pool.’ And it’s pretty explosive when you see it happen.”
Rieder also called on new Federal Reserve chair Kevin Warsh to hold off on raising interest rates, as the market expects him to do by January, with a lower oil price likely taking the sting out of inflationary price pressures.
Warsh’s first Fed meeting will conclude on Wednesday, when he will announce his first interest rate decision—almost certainly a “hold” as officials continue their wait-and-see approach to jobs and inflation.
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The bitcoin price has bounced back from its recent lows, though remains well off its peak of $126,000 per bitcoin reached in October last year.
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The oil price has dropped to around $80 per barrel, helping spur risk assets like bitcoin higher over the last week.
Rieder’s $9 trillion money market deployment prediction, “suggests that the issue is not a shortage of liquidity. Rather, liquidity is searching for a new home,” Bitunix analyst Dean Chen said in emailed comments.
“For the crypto market, this remains a classic liquidity-and-risk-appetite environment. The prospect of a peace agreement, lower energy prices, and renewed capital inflows supports broader market sentiment. However, if Warsh delivers a more inflation-focused or balance-sheet-tightening message at this week’s FOMC meeting, investors may once again reassess expectations for future liquidity conditions.”
Meanwhile, traders are closely watching for BlackRock’s iShares Bitcoin Premium Income exchange-traded fund (ETF), using the ticker BITA, to begin trading after the company filed paperwork for it on Thursday.
The filing “typically means launch in one week,” Eric Balchunas, an ETF analyst at Bloomberg Intelligence, posted to X.