The investment management company has launched a private trust, which will be its first product offering direct Bitcoin exposure.
Private Trust For Institutional Investors
The private trust launched by BlackRock will provide institutional clients based in the United States with direct exposure to spot Bitcoin. The trust will track the performance of Bitcoin while lowering the expenses and liabilities. The decision to embark upon this project was taken due to the residual interest from certain clients. The company announced the launch of the trust through a public statement on its website, where it wrote,
“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.”
Being the largest, oldest, and most liquid crypto, Bitcoin has captured the attention of BlackRock’s client base, who are keen to dabble in this asset through an investment management firm.
BlackRock’s Web3 Moves
Many communities and groups have raised concerns about the energy-intensive process of Bitcoin mining and its environmental impact. Although BlackRock is not involved in any way with the mining operations, the team has mentioned that it would be doing its part in supporting initiatives to introduce sustainable energy usage in Bitcoin mining. The company’s Web3 initiatives have been distributed among four areas of interest: permissioned blockchains, stablecoins, cryptoassets, and tokenization. The spot Bitcoin private trust is its initiative in the cryptoassets category.
Partnership With Coinbase
Earlier this year, BlackRock CEO Larry Find had indicated that the company might start dabbling in crypto trading. The company’s other noteworthy web3 endeavor was its recent partnership with crypto exchange Coinbase to offer cryptocurrencies to institutional investors. The partnership will enable BlackRock’s institutional investment management platform Aladdin to provide its clients with crypto trading functionalities and all associated capabilities. To access these services, institutions must sign up for Coinbase Prime, a trading solution service tailormade for hedge funds, asset collectors, financial institutions, and corporate treasuries.
Institutional Investors Want More Crypto Action
With roughly $9 trillion in assets under management for institutional clients, including central banks, BlackRock is the biggest asset fund manager in the world. According to a market leader and expert, Barry Silbert, the recent Bitcoin private trust from BlackRock will provide a simpler and safer channel for central banks around the globe to invest in the crypto. Institutional investors are increasingly warming up toward digital assets despite an overwhelming bear market. With individual investors pulling out of the market, there is ample space for institutional investors to set up shop through the safe exposure promised by BlackRock’s private trust.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.