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BlackRock launches spot BTC private trust

BlackRock
TL;DR Breakdown
  • BlackRock has launched a private trust to give clients exposure to spot Bitcoin
  • BlackRock recently secured a partnership with Coinbase crypto exchange
  • Bitcoin price soars close to $25k

BlackRock, the world’s largest asset management firm, has dipped its toes into the crypto market. BlackRock has announced the creation of a spot bitcoin private trust for US institutional customers. According to the official statement, BlackRock will track BTC’s performance, giving investors direct exposure to the crypto’s price.

The decision comes a week after crypto exchange Coinbase Global Inc announced it had teamed up with BlackRock. The collaboration aims to offer institutional clients access to crypto trading and custody services.

BlackRock expands deeper into the crypto industry

The latest news highlights how traditional institutions, such as pension and hedge funds, increasingly invest in crypto assets. These businesses have wagered that the alternative asset sector is here to stay.

BlackRock’s faith in crypto comes as the crypto sector has been battered by the most severe crypto winter. The prices of crypto tumbled as investors fled risky assets amid geopolitical turmoil, inflation, and concerns about an upcoming recession.

Despite the steep downturn in the digital asset market, we are still seeing substantial interest from some institutional clients in how to efficiently and cost-effectively access these assets using our technology and product capabilities.

BlackRock official post

Bitcoin’s price is still more than 60% below its all-time high of nearly $69,000. Despite this, many investors believe it has bottomed out with equities. Financial statements show that the two asset classes have been more correlated to each other this year than ever before, as risk assets have plummeted in value.

On Thursday, the Bitcoin price rose above $24,700 for the first time since just before it plummeted to its June low. The Bitcoin rate is currently 24,347.60 USD, according to CoinMarketCap. It has a 38,176,457,487 USD 24-hour trading volume. In the last 24 hours, Bitcoin has risen by 1.29%.

Bitcoin is the oldest, largest, and most liquid cryptoasset, and is currently the primary subject of interest from our clients within the cryptoasset space. Excluding stablecoins, bitcoin maintains close to 50 percent of the industry’s market capitalization.

BlackRock

 BlackRock, which manages $8.5 trillion in assets as of June 30, identified permissioned blockchains, stablecoins, cryptocurrency, and tokenization as areas for future development.

Traditional finance entities change their tune on crypto

In recent years, many previously hostile institutions to the crypto industry have begun to adopt a more positive attitude. However, concerns around bitcoin mining‘s harmful environmental effects have remained an issue for many people.

Five years ago, Larry Fink, the CEO of BlackRock, dubbed Bitcoin an “index of money laundering.” He appeared to alter his stance in 2020 when he acknowledged the potential of Bitcoin to become a “global market.”

BlackRock has gradually come around to crypto, with a blockchain ETF released in April. In March, BlackRock CEO Larry Fink said the escalating conflict in Ukraine might boost digital currency adoption.

The firm also stated in the release that it is “impressed” by RMI’s monitoring programs and Energy Web’s initiatives. According to the organization, these organizations bring transparency to sustainable energy usage in bitcoin mining.

BlackRock is encouraged that organizations such as RMI and Energy Web are developing programs to bring greater transparency to sustainable energy usage in bitcoin mining, and will follow progress around those initiatives.

BlackRock

On the Aug. 11 Wall Street open, Bitcoin (BTC) pushed toward $25,000 after news that the world’s largest asset manager had launched a bitcoin product. Additionally, the energy web token (EWT) jumped 25% to a high of $3.18 Thursday after it was mentioned in a BlackRock press release.

The latest news in BlackRock’s foray into crypto comes as no surprise. The firm recently announced a collaboration with Coinbase, allowing its institutional clients to buy crypto, including bitcoin.

The partnership will enable Aladdin and Coinbase’s typical clients to access the digital assets trading lifecycle through integration between Coinbase and the Aladdin platform. Everyday investors will be able to manage their bitcoin exposures alongside their public and private investments once common clients can utilize Coinbase’s comprehensive trading, custody, prime brokerage, and reporting capabilities.

The news comes as the crypto market braces for another key deadline when Wall Street regulators are expected to decide on whether or not to approve a bitcoin exchange-traded fund. So far, just bitcoin futures ETFs have been given the green light by regulators.

BlackRock’s digital asset activities extend to four areas of digital assets and their associated ecosystems, where they see potential to benefit their clients and capital markets more broadly. They’ve mentioned the following: permissioned blockchains, stablecoins, cryptoassets, and tokenization.

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Florence Muchai

Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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