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• BlackRock Launches Bitcoin Private Trust for US Institutional Investors
• BlackRock sees strong customer interest in Bitcoin despite crypto market slowdown
• Analysts enthusiastic
Shortly after BlackRock announced a partnership with Coinbase, in which institutional clients of BlackRock’s trading platform Aladdin can acquire Bitcoin more directly, the world’s largest asset manager did it again: In a message on the company’s website, BlackRock announced in mid-August that it was buying a Bitcoin Launched Private Trust. It is a bitcoin fund in the form of a private trust, but currently only targets US institutional investors. Due to the nature of the product as a trust fund, BlackRock directly purchases Bitcoin and holds them on behalf of the relevant clients. The trust is thus fully deposited with physical bitcoins and will thus reflect the performance of the largest cryptocurrency – minus any fees. BlackRock has not provided any information on how high the fees are and what the minimum investment amount is that investors must bring to get started with Bitcoin Trust.
BlackRock: Continued strong demand for Bitcoin despite market decline
BlackRock has had a difficult second quarter: assets under management as well as revenue and adjusted profit fell significantly. With the new Bitcoin Trust, the asset manager can try to open up more to the customers’ interests and thus obtain new funds again. “Bitcoin is the oldest, largest and most liquid crypto-asset and is currently our clients’ main focus in the crypto-asset space,” reads the official statement. The downturn in the crypto market since the beginning of the year has not changed that. “Despite the sharp downturn in the digital asset market, we continue to see significant interest from some institutional clients in how our technology and product capabilities can efficiently and cost-effectively access these assets,” BlackRock continued.
With the new investment product, which will initially hold only Bitcoin and no other digital currencies, the asset manager competes with Grayscale Bitcoin Trust, which according to “Barron’s” now manages assets of 15 billion US dollars. Both investment instruments allow professional investors to invest in the oldest digital currency without having to go through a crypto exchange themselves. According to the news website, experts also believe that it is possible that BlackRock may add investment options in other cryptocurrencies to its offering in the future.
Analysts praise Coinbase – Possible entry point created for institutional investors
For BlackRock, the launch of a Bitcoin Trust is another step in a long journey that has seen the asset manager’s stance on the number one cryptocurrency shift from “skepticism to acceptance to investment,” according to Morgan Stanley analyst Michael Cypry’s “Barron’s articulate. earlier criticism of , that Bitcoin was only a measure of the demand for money laundering, as expressed by BlackRock CEO Larry Fink in 2017, now seems to be somewhat behind.
Meanwhile, BlackRock’s current push is being celebrated among crypto enthusiasts. “The launch of BlackRock’s Bitcoin fund shows how much crypto has matured as an asset class,” commented Sui Chung, CEO of crypto index provider CF Benchmarks, according to The Shareholder. “The bitcoin community has been talking about ‘institutions coming’ for years. It looks like they’re finally knocking on the door,” said Frank Downing, an analyst at Ark Investment Management, according to Barron’s. In fact, it is conceivable that BlackRock’s commitment will increase the pressure on other financial service providers to also include Bitcoin in their offerings. In addition, the move may gradually restore confidence in cryptocurrencies after recent price falls, although the experts from “Barron’s” believe that it will be some time before many institutional investors are actually able to take the plunge. But if it happens one day, it will likely stabilize crypto prices. This is also indicated by the price movements of Bitcoin: in the days after BlackRock announced its cooperation with Coinbase and Bitcoin Private Trust, the largest cyber currency returned to the $25,000 mark. However, the gains initially proved to be short-lived. It remains to be seen how the new offerings will be received and used by BlackRock clients.
Gearing must be between 2 and 20
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