BlackRock Inc. is launching its first-ever investment product in Bitcoin, marking the world’s largest asset manager’s significant entry into crypto markets.
The new private Bitcoin trust seeks to track the price of the largest cryptocurrency and responds to demand from large institutional clients seeking exposure to the asset despite its price drop this year, according to a statement issued by New York-based BlackRock on Thursday. The firm states that:
“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,”
Bitcoin has lost roughly half its value in 2022, while the failures of the Terra ecosystem and hedge fund Three Arrows Capital have raised concerns about the market’s resilience and prompted increased regulatory scrutiny.
The announcement of the new Bitcoin trust is BlackRock’s second major move into digital assets in the last week, demonstrating how Wall Street’s biggest players are deepening their involvement in an industry that was criticized only a few years ago for being susceptible to fraud.
Last week, BlackRock announced a high-profile partnership with cryptocurrency exchange Coinbase Global Inc. to enable institutional traders to manage their Bitcoin investments alongside other portfolio assets such as stocks and bonds. The move boosted Coinbase’s shares, with analysts concluding that the venture validated digital assets and the crypto industry in general.
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