BlackRock introduces a private trust to provide customers with exposure to bitcoin

Home » BlackRock introduces a private trust to provide customers with exposure to bitcoin

On September 4, 2019, in Frankfurt, Germany, BlackRock Inc. CEO Larry Fink gestures while speaking at the Handelsblatt Banking Summit.

A private trust that BlackRock has formed gives institutional clients in the US direct exposure to bitcoin.

Though it was brief, the new product was announced in a blog post on Thursday by the biggest asset management in the world.

“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,” The business claimed in the post.

The price of bitcoin has dropped by more than 60% from its record high of around $69,000. However, given that stocks and other equities have this year’s highest correlation to one another ever and that risk assets have been falling since 2022, many investors feel that stocks have reached a bottom. The digital currency reached its highest point since shortly before it dropped to its trough in June on Thursday, rising over $24,700.

“Bitcoin is the oldest, largest, and most liquid cryptoasset, and is currently the primary subject of interest from our clients within the cryptoasset space,” The post went on.

Following CEO Larry Fink’s statement earlier this year that BlackRock clients have been expressing “increasing interest” in digital currencies, including stablecoins and “the underlying technologies” — also known as blockchain — the company has finally made the announcement.

On Thursday, BlackRock also praised RMI and EnergyWeb, two energy organizations, for their efforts “to bring greater transparency to sustainable energy usage in bitcoin mining,” adding that the company “will follow progress around those initiatives.”

Institutional investors who were originally against cryptocurrencies have altered their minds in recent years, but environmental issues related to bitcoin mining have remained a barrier for many.

According to the post, BlackRock has been looking into topics including permissioned blockchains, stablecoins, cryptoassets, and tokenization with “potential to benefit our clients and capital markets more broadly.

The news on Thursday is the most recent in BlackRock’s venture into cryptocurrency. The organization, which oversees roughly $8.5 trillion in assets, has declared a collaboration with Coinbase that will enable its institutional clients to purchase cryptocurrencies, starting with bitcoin.

The Securities and Exchange Commission’s refusal to approve a spot bitcoin exchange-traded fund has new institutional investors in the market fuming. Only bitcoin futures ETFs have received approval thus far.

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