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BlackRock Launches a Spot Bitcoin Private Trust for Its Institutional Clients in the US

  • The asset manager launches a new investment product following substantial interest from its clients.
  • The announcement comes nearly seven days after the popular crypto exchange, Coinbase, revealed a partnership with BlackRock.

A Thursday blog post by the world’s biggest asset manager (BlackRock) stated that the firm now has a private trust offering for its institutional clients in the US, where they can have direct exposure to Bitcoin. However, the asset management firm didn’t reveal full details about this new investment product.

The blog post further revealed that many of BlackRock’s institutional clients had shown increasing interest in using its technology and product features to access digital assets efficiently and cost-effectively. The announcement comes nearly seven days after popular crypto exchange, Coinbase, revealed a partnership with BlackRock for the latter’s institutional clients to have direct exposure to crypto custody services and trading, especially Bitcoin.

BlackRock and the Crypto Market 

The latest developments prove that this alternative asset class is here to stay. Recently, several traditional institutions such as banks, hedge funds, and pension funds have been making moves to explore crypto assets. It is worth noting that traditional investors have been making such moves despite the slump in crypto prices as investors sell off crypto as part of their risky assets.

Many crypto holders have been selling their digital assets due to geopolitical issues, inflation, and the possibility of an imminent recession. Bitcoin is still over 60 percent below its peak price of nearly $69,000. On Thursday morning, Bitcoin’s price traded at over $24,700, its highest price since dropping to its June 2022 low.

The BlackRock announcement further said Bitcoin is the main subject of interest from its clients interested in investing in crypto. “Bitcoin is the oldest crypto asset, the biggest and most liquid.” Nevertheless, many industry analysts claim that cryptos and stocks have hit their bottom. Since the beginning of this year, these asset classes have been correlating with each other more than ever.

In March 2022, BlackRock CEO, Larry Fink, said the company’s clients are increasingly interested in cryptocurrencies, including stablecoins and blockchain technology (the technology that powers these digital assets). About a month later, BlackRock became one of the primary managers of USDC’s cash reserves.

On Thursday, the biggest asset management firm also credited RMI and EnergyWeb foundation (both energy-focused nonprofits) for their role in providing greater clarity for sustainable energy consumption in Bitcoin mining. After the BlackRock shoutout, the Energy Web Token (EWT) price rose by 25 percent to $3.18.

The post added that BlackRock would follow up on the progress of these initiatives. Over the last few years, many institutional investors have embraced the crypto industry despite being vehemently against it before. However, many are still worried about the environmental issues that Bitcoin mining poses.

The asset manager stated that it is exploring possible areas in the crypto sector that can benefit its clients and, more broadly, the capital markets. The company will focus on tokenization, permissioned blockchains, crypto assets, and stablecoins.

BlackRock’s foray into crypto comes when new institutional investors are frustrated at the US SEC (Securities and Exchange Commission) ‘s insistence on not approving a spot Bitcoin ETF (exchange-traded fund). Thus far, the sec has only been approving Bitcoin futures ETFs.

Rebecca Davidson Verified

Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”

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