The world’s largest asset management company BlackRock has sent shockwaves through the crypto world by announcing a new spot bitcoin private trust.
The investment management giant, which already manages an enormous $8.5 trillion in assets, has partnered with crypto exchange Coinbase for the venture. It has opened the door for its institutional clients in the US to access and invest in bitcoin.
Writing in a recent blog post, BlackRock explained the reasoning behind the launch of its new spot bitcoin private trust:
“BlackRock is committed to providing clients with access to their choice of investment opportunities and has launched a spot bitcoin private trust. The trust is available to U.S. institutional clients and seeks to track the performance of bitcoin, less expenses and liabilities of the trust.
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 unexpected move has been described by experts including analyst Marcus Sotirou from Global Block as “opening the floodgates for institutions to access bitcoin.”. He also named it a ‘significant milestone’ for the industry, as it sends a clear signal to other institutions. This includes direct competitors like the digital asset manager Grayscale, along other Wall Street stalwarts considering a move into the crypto access market.
Also commenting on the news was Alex Adelman, the CEO of bitcoin rewards app Lolli. He told Forbes.com that recent crypto market price crashes don’t seem to be affecting investor confidence in some areas of the market:
“Demand for bitcoin among Wall Street’s power players has effectively decoupled from prices in the broader crypto markets,”
“This unflagging interest in bitcoin by BlackRock and its sophisticated institutional clients, even amid a market downturn in crypto at large, reflects a heightened, nuanced understanding of bitcoin’s global, long-term importance among market-moving players on Wall Street,”
Coinbase connects to Aladdin
At around the same time, Coinbase announced that it would be connecting to Aladdin. This is BlackRock’s investment technology platform, which handled around $21.6 trillion in assets in 2020. The partnership will provide common clients of both Coinbase and Aladdin with access to the digital assets trading lifecycle – starting with bitcoin.
BlackRock’s global head of strategic ecosystem partnerships Joseph Chalom said in a recent statement:
“Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets,”
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