Source: Talking Outside the Conversation
Last month, BlackRock released a video about Bitcoin that lasted about three minutes, and one sentence seemed to touch a sensitive nerve for many people, as shown in the figure below. In this video, they mentioned:
There is no guarantee that Bitcoin’s 21 million supply cap will not be changed.
There is no guarantee that Bitcoin’s 21 million supply cap will not be changed.
The reason this video has recently made some Bitcoin supporters or media feel uneasy is that people have begun to doubt whether BlackRock might initiate a hard fork of Bitcoin.
So, does BlackRock really have the idea of forking Bitcoin?
Next, we will explore this issue step by step from three dimensions!
1. Changes in the relationship between BlackRock and Bitcoin
In 2017, BlackRock's co-founder said in a media interview: 'Bitcoin just shows you how much money laundering demand there is in the world, that's all.' As shown in the figure below.
In 2018, BlackRock formed a team to explore potential investments in digital currencies and blockchain.
In 2021, BlackRock publicly expressed optimism that Bitcoin would become a global market asset and officially began to get involved in Bitcoin. Its global allocation fund gained some Bitcoin exposure through Bitcoin futures issued by the Chicago Mercantile Exchange (CME).
In 2022, BlackRock executives publicly acknowledged Bitcoin as 'digital gold' and stated that Bitcoin has the potential to fundamentally change the financial industry.
In June 2023, there were reports that BlackRock submitted an application for a Bitcoin spot ETF to the SEC. As shown in the figure below.
In August 2023, BlackRock invested $384 million in four Bitcoin mining companies. In addition, they also established partnerships with some large crypto participants (such as Coinbase and Circle). As shown in the figure below.
In January 2024, the Bitcoin spot ETF was officially approved, and it took only seven weeks for IBIT (BlackRock's launched BTC ETF) to break the $10 billion mark. As of January 6, 2025, this Bitcoin ETF, established only 11 months ago, has accumulated over $54 billion in assets, becoming one of the most successful products in ETF history. As shown in the figure below.
2. Historical hard forks concerning Bitcoin
Since the birth of Bitcoin, attempts to expand its capacity have never stopped, and thus, hard forks of Bitcoin have occurred multiple times.
In simple terms, a fork may occur when the Bitcoin network protocol changes or [when two or more blocks have the same block height], and such a fork will affect the validity of network rules. Therefore, a consensus must be reached for a fork; otherwise, a permanent split may occur, leading to a hard fork.
Based on the different objects and purposes of hard forks, hard forks can mainly be divided into the following three categories:
(1) Hard forks of the Bitcoin client
For instance, Bitcoin XT, which forked in 2015, changed the block size limit to 8 MB/block, and the TPS was also increased to 24. At its peak, this fork protocol had over 40,000 nodes running, but just a few months later, user interest waned, and it was basically abandoned.
For example, there are also Bitcoin Classic (比特币经典) and Bitcoin Unlimited (比特币无限), which forked in 2016.
(2) Hard forks of Bitcoin BTC
This type is also the most common type of fork in history. Forks concerning Bitcoin are mainly created by changing network rules and sharing the transaction history before a certain point in time with Bitcoin, thereby creating a new blockchain network.
Notable or representative forked coins include:
Bitcoin Cash (BCH), forked on August 1, 2017, at block 478558. After the fork, every holder of one Bitcoin (wallet address) can receive one BCH. BCH should be considered the most successful hard fork coin to date, maintaining a market value of $9.4 billion.
Bitcoin Gold (BTG), which forked on October 24, 2017.
BSV (Bitcoin SV), which forked on November 15, 2018.
XEC, forked on November 15, 2020.
And so on... As shown in the figure below.
According to incomplete statistics, there are at least 70 currencies forked from Bitcoin BTC, as shown in the figure below, but most of these forked coins are used for speculation or scams (i.e., using forks as a pretext for fraud).
(3) Experimental hard forks
In addition to the two types of client hard forks and BTC hard forks mentioned above, there is another common type that we can call experimental hard forks of Bitcoin.
For example, LTC, which we are relatively familiar with, belongs to this category. Some people refer to these types of forked coins as 'Bitcoin's altcoins' because they technically have the same implementation principles as Bitcoin.
3. Would BlackRock succeed in initiating a hard fork of Bitcoin?
For staunch believers in Bitcoin, the fixed supply of 21 million is one of the core consensus of Bitcoin and is absolutely not allowed to change. Any change in supply could directly undermine the core value of Bitcoin, leading to a collapse of trust. Although there have been many forking events in history, resulting in nearly a hundred types of Bitcoin forks, BTC still remains BTC.
Of course, some supporters of Bitcoin believe that adjustments should be made. They think that Bitcoin needs to increase its supply to address some security budget issues, as the main logic supporting their view is that with Bitcoin's halving mechanism, future block rewards will further decrease, which will reduce the income of miners. Meanwhile, Bitcoin's transaction fees may not cover miners' operational costs, potentially impacting the security of the Bitcoin network.
As for the statement mentioned at the beginning of our article from the video released by BlackRock, whether it means they really intend to change Bitcoin or if it's just a simple reminder to the Bitcoin community is something we cannot know; it needs time to verify.
From the available information, it seems that BlackRock has some new considerations. For example, in the document submitted to the SEC for IBIT (iShares Bitcoin Trust ETF), we can find the following description on page 27:
In the event of a hard fork of the Bitcoin network, the Sponsor will, if permitted by the terms of the Trust Agreement, use its discretion to determine which network should be considered the appropriate network for the Trust’s purposes.
determine which network should be considered the appropriate network for the Trust’s purposes.
In the event of a hard fork of the Bitcoin network, if permitted by the terms of the Trust Agreement, the Sponsor will use its discretion to determine which network should be considered the appropriate network for the Trust’s purposes.
Although this document does not clearly indicate or show that BlackRock intends to participate in forking Bitcoin, they indeed have some plans to deal with Bitcoin forks.
However, in our own view, we do not believe that forking Bitcoin will succeed. At most, it will give birth to another new BCH or LTC, just like history. Moreover, forking would also mean that the valuation of Bitcoin would decrease, which is unlikely to be accepted by the market. At the same time, the Bitcoin community is also unlikely to abandon the existing Bitcoin network to support the so-called environmentally friendly fork.
Or to take a step back, even if BlackRock really forks Bitcoin in the future and creates a more environmentally friendly 'Bitcoin,' perhaps, due to their influence, it may temporarily dominate and attract some capital inflow and favor, leading to a short-term impact on the price of existing Bitcoin. It could even affect institutions holding large amounts of Bitcoin, such as MicroStrategy (which, as of January 6, 2025, holds a total of 446,400 Bitcoins, with a total purchase cost of about $27.9 billion, and an average purchase price of about $62,397). However, from a longer-term perspective, a centralized 'Bitcoin' can never surpass decentralized Bitcoin; BTC will always be BTC.
However, at least one thing is worth our continued thought: how can we uphold the core value of the Bitcoin protocol?
4. In the last part of the article, let's briefly talk about the market.
At different stages, the topics discussed by everyone are different. For example, in recent days, I found that one of the main topics discussed in the group is opinions on 'escaping the peak of the bull market.' Some partners also expressed their insights, as shown in the figure below.
Regarding this issue, various KOLs (key opinion leaders) online have their own opinions. Some say it's already at the peak and urge to cash out, some say it peaked in March this year, others say in May, some say it won't peak until the end of the year, and there are even those who say it won't peak until 2026...
As for whether the bull market has reached its peak now? Or when exactly will the bull market peak? We cannot provide an accurate answer.
Everyone's goals, positions, risk preferences, etc., are different. Almost everyone psychologically hopes to buy at the lowest point and sell at the highest point, but this is actually unrealistic.
As Boss Heng said in the group a few days ago: what suits you is the best. Almost every method has people making money and people losing money because the execution timing and intensity differ. Ultimately, the path must be walked by oneself. If you don't understand something, either don't touch it, or truly understand it, knowing where the risks and returns are, whose money I earn, when to earn it, and how to earn it. As shown in the figure below.
Regarding 'escaping the peak,' different people may have different understandings. Some believe that escaping the peak means selling at the highest point all at once to maximize profits. But for us...
This article is not finished yet; we will continue to update the remaining content through Talking Outside the Conversation.
