The world’s largest asset manager BlackRock invests in Bitcoin
Earlier this month, BlackRock announced that it had agreed its collaboration with Coinbase and its Aladdin platform to make it easier for institutional investors to manage and trade Bitcoin. Now it has gone even further by launching a Bitcoin Trust to further enter an area hitherto little explored by traditional financial players.
So far, this will just open up the opportunity for American investors to directly invest in Bitcoin, because, as the company says, they are increasingly interested in it.
According to Peter Hotovets, chief analyst at the technology company SoftVision, this indicates two things.
“Firstly, BlackRock is betting that the market is either close to the bottom, or has already found its bottom in previous months. Otherwise, he would have waited for more favorable conditions to launch. A private trust will allow American institutional investors to directly access Bitcoin, and BlackRock, of course, does not want and cannot afford for investors in one of its products to suffer significant losses immediately after launch,” he believes.
According to the data by Coinmarketrate.com Bitcoin hit its lowest low in more than a year in mid-June when it was trading deep around $20,000. Since then, it has risen in price by about a quarter, and currently Bitcoin can be bought for almost $ 24,000. Thus, although the value of the largest cryptocurrency is still very volatile, BlackRock’s latest move shows that even large conservative players, who usually move mainly in markets with high liquidity, are beginning to trust it.
Institutionals see Bitcoin as the future
“BlackRock is convinced that cryptocurrencies are an asset that will remain. Large institutional players are obviously really interested in cryptocurrencies, and BlackRock is simply satisfying the demand by creating a product designed for the largest players. Its movement indicates that the BTC has already matured as a market asset,” adds Petr Hotovets.
Commenting on the creation of the new trust, BlackRock stated that, despite the sharp decline in the digital asset market, it is seeing significant interest from institutional clients.
“Bitcoin is the oldest, largest and most liquid crypto asset and is currently the main focus of our clients’ attention in the field of digital currencies. Excluding stablecoins, Bitcoin holds almost 50 percent of the industry’s market capitalization,” BlackRock said.
The company also noted that it is closely monitoring activities aimed at increasing the transparency of sustainable energy use in the production of BTC. Although the company’s latest initiative is directly related to this crypto asset, it stated that it is considering other areas, including stablecoins and tokenization.
The entry of BlackRock may mean new discoveries. It will be interesting to see how and how quickly the market reacts to this shift.
Barry Silbert, former CEO of Grayscale, a digital asset management company, tweeted on the BlackRock news: “And here’s Wall Street…”.
In turn, Blockware Solutions analyst Will Clemente called BlackRock’s statement “probably the most bullish news for long-term Bitcoin holders in history.” Among other things, according to him, this means that if other traditional players do not engage in cryptocurrencies, they may gradually lose customers.