BlackRock Launches Bitcoin Private Trust

August 11, 2022

BlackRock Inc., the largest asset manager in the world, launched a spot bitcoin private trust for institutional clients, according to the company’s blog post on Thursday.  

Although other such products exist, including the Grayscale Bitcoin Trust (GBTC), it’s the issuer’s size—BlackRock has $10 trillion in assets under management—that makes the debut noteworthy, and reflects a growing number of issuers embracing the cryptocurrency space. 

BlackRock said it was “encouraged” by firms working on improving transparency around sustainable energy in bitcoin mining, noting it would continue to monitor developments in the cryptocurrency space, although BlackRock does not mention a focus on sustainability in describing its new private trust. 

Growing Institutional Interest 

In the absence of a comprehensive regulatory framework governing cryptocurrency space, large asset managers have been making modest inroads in recent months. Fidelity Investments Inc. started allowing its users to hold bitcoin in April, and Charles Schwab recently launched an equity ETF covering cryptocurrency-related stocks, its first thematic ETF.  

BlackRock also recently entered into a partnership with cryptocurrency brokerage Coinbase Global Inc. aimed at allowing BlackRock’s “common clients” to purchase cryptocurrency through BlackRock’s electronic investment system, Aladdin.  

Bitcoin, the largest cryptocurrency, is currently priced at more than $24,000, down from a high of nearly $68,000 in November 2021, a decline that industry analysts have referred to as the “crypto winter.” 

With many still hanging on to the possibility of the SEC approving a physical bitcoin ETF, which would likely come with lower fees and narrower spreads, private trusts may gain more prominence, as the entry point for bitcoin remains attractive compared with its highs last year. 

 

Contact Heather Bell at [email protected] 

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