BlackRock launches Bitcoin trust – but only for select clients
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(Kitco News) - BlackRock, the largest asset manager in the world, continues to wade deeper into the realm of cryptocurrencies by revealing on Thursday that it has launched a private trust that offers institutional clients in the U.S. direct exposure to Bitcoin (BTC).
According to the announcement, the trust will “track the performance of bitcoin, less expenses and liabilities of the trust,” as part of the firm's commitment “to providing clients with access to their choice of investment opportunities.”
BlackRock was able to launch the trust without first obtaining approval from regulators since private investment trusts that do not solicit investments from retail investors are not required to register with authorities.
The move comes as institutional interest in cryptos has been on the rise despite Bitcoin trading nearly 65% below its all-time high of $68,789, which BlackRock addressed in its blog.
"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 company said in the post.
The news of this new fund comes just days after it was revealed that BlackRock has partnered with the top U.S.-based cryptocurrency exchange Coinbase to give clients who are members of Coinbase and BlackRock’s Aladdin institutional investment platform access to crypto trading, custody, prime brokerage, and reporting services, starting with Bitcoin.
|BlackRock's partnership with Coinbase shows that institutions are looking to buy the dip|
As noted in today’s announcement from BlackRock, “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.”
Judging by the statement from BlackRock, the asset manager is just getting started with its expansion into crypto as it looks to get involved with some of the most popular sectors of the ecosystem.
“BlackRock has been conducting work in four areas of digital assets and their associated ecosystems where we see potential to benefit our clients and capital markets more broadly, including: permissioned blockchains, stablecoins, cryptoassets, and tokenization,” the post stated.
Back in March, BlackRock CEO Larry Fink hinted that today’s announcement was a possibility when he mentioned that “As we see increasing interest from our clients, BlackRock is studying digital currencies, stablecoins, and the underlying technologies to understand how they can help us serve our clients,” in his annual letter to shareholders.