How Funds Actually Make Money From BitcoinIf you spend more than five minutes on Crypto TikTok (YouTube or X are not much different), you’d think the entire market depends on:
- who “bought the dip,”
- who “sold the top,”
- and which whale “decided” to pump or dump.
The screamers with flashy thumbnails and zero understanding yell:
- “BlackRock is buying—BULLISH!”
- “Whales are selling—CRASH INCOMING!”
- “Institutions are entering the market!!!”
- No nuance.
- No structure.
- No clue.
Because here’s the truth:
What BlackRock buys or sells is almost irrelevant to you.
Funds do not make money the way TikTok believes.
They don’t need Bitcoin to go up.
They don’t need Bitcoin to go down.
They need one thing:
Movement. Volatility. Math.
Let’s destroy the hype and show how funds actually make money.
1. Why “BlackRock is buying BTC” tells you absolutely nothing
Retail sees a headline:
“ETF inflows: +5,000 BTC today!”
And jumps to conclusions:
“They know something!”
“Price HAS to go up!”
“Institutions are bullish!”
No.
A fund can buy BTC and still be:
- 100% hedged
- delta-neutral
- directionally flat
- risk-neutral
- fully protected against price movement
The purchase is not a bet.
It’s a component of a structured position.
Buying BTC is just Step 1.
What matters is Step 2, 3, 4, 5…—all the parts TikTok doesn’t even know exist.
2. Why TikTok “analysts” have no idea what they’re talking about
If someone:
- screams in every video,
- says “bullish” or “bearish” 40 times a minute,
- thinks “institutions pump price,”
- doesn’t know what delta, gamma, basis, hedging, ATM straddles are…
…then they are not explaining institutional flow.
They are farming views and likes, not teaching markets.
Let’s be blunt:
If you can’t explain a delta-neutral hedge, your opinion about what BlackRock “plans to do” or "is doing" is worthless.
So let’s walk through how a real fund uses BTC to print money without caring if price goes up or down.
3. How a real fund makes money from volatility (step-by-step, using $100,000 BTC)
Assume:
- BTC price = $100,000
- A fund wants exposure to volatility, not direction
- They buy a BTC ATM straddle (call + put at 100k)
- Delta ≈ 0
- Gamma > 0 → the part that generates money
- They also own BTC spot for hedging.
- Let’s say the fund holds 1 BTC worth $100,000 as inventory for hedge adjustments.
At the start:
Delta-neutral. No directional risk.
Now let’s see how they profit.
Step 2 – BTC goes up 10% → $110,000
Straddle delta becomes +0.5 BTC.
The fund is unintentionally long 0.5 BTC.
To go back to neutral:
The fund sells 0.5 BTC at $110,000.
Cash received:
0.5 × 110,000 = $55,000
Theoretical cost basis (100k):
0.5 × 100,000 = $50,000
👉 Profit from hedge = $55,000 – $50,000 = $5,000
Plus, the straddle increased in value due to volatility.
Step 3 – BTC drops 10% → $90,000
Now straddle delta flips negative: –0.5 BTC
To get back to neutral:
The fund buys 0.5 BTC at $90,000.
Cash paid:
0.5 × 90,000 = $45,000
If they later sell that BTC at the baseline of 100k:
👉 Profit = $50,000 – $45,000 = $5,000
Again, without needing BTC to go up or down, “as predicted.”
This is called:
Gamma scalping — the quiet, relentless engine behind institutional P&L.
Up move → sell high.
Down move → buy low.
Repeat. Print. Sleep.
4. Where does the REAL profit come from?
A fund earns from:
- hedge adjustments (buy low, sell high, but mathematically—not emotionally)
- straddle appreciation as realized volatility exceeds implied volatility
- basis differences between spot and futures
- neutrality to direction, allowing consistent compounding
They make money even if Bitcoin swings between 95k–105k for weeks.
The only time they lose?
When BTC does NOT move.
Because then the straddle premium decays.
That's it.
Nothing to do with faith, predictions, narratives, influencers, or ETF flows.
5. So why should YOU ignore what BlackRock is doing?
Because:
- You are not BlackRock.
- You do not run a delta-neutral book.
- You do not make money from gamma exposure.
- You do not scalp intraday hedges on $100M positions.
- You do not capture basis spreads across spot and derivatives.
- You do not have a trading desk rebalancing risk every hour.
But the TikTok screamers will still tell you:
“Institutional buying = bullish!”
“Institutional selling = bearish!”
“Whales know something!”
They don’t know anything.
Especially not about institutional structure.
So here’s the punchline:
Watching what funds do—without understanding why they do it—is the fastest path to confusion in the best case and destruction in the worst.
You don’t have their:
- tools,
- capital,
- execution speed,
- risk models,
- mandate,
- or mathematical framework.
So trying to mimic them is not just pointless —it’s dangerous.
Final Lesson: Ignore the noise, ignore the hype, ignore the TikTok parade.
BlackRock doesn’t care about bull markets or bear markets.
BlackRock doesn’t need Bitcoin to moon.
BlackRock doesn’t panic when Bitcoin drops.
Because BlackRock doesn’t trade the story.
They trade the structure.
And unless you operate like a fund — stop pretending their moves matter to your trading.
You’re not them.
You don’t have their machinery.
You don’t have their volatility book.
So:
Stop watching what institutions do.
Start understanding what you should do.
That’s the difference between surviving and blowing up.
P.S: BlackRock and TikTok are used just as an example:)
