BlackRock launches a private trust to give clients exposure to spot bitcoin

BlackRock launched a private trust that offers institutional clients in the U.S. access to Bitcoin.

Although it contained a lot of detail, the largest asset manager in the globe announced the new product in a post on Thursday.

The company stated in the post that despite the sharp downturn in digital asset markets, they are still seeing significant interest from institutional clients in ways to access these assets efficiently and economically using their technology and product capabilities.

Bitcoin’s all-time high of nearly $69,000 is still 60% lower than it was in 2016. Many investors believe that it has reached a bottom with stocks. The two asset classes are more closely correlated this year than ever, despite 2022’s decline in risk assets. The digital currency rose to $24,700 on Thursday, its highest point since June’s low.

The post said that Bitcoin is the oldest, largest and most liquid cryptoasset and is currently the subject of primary interest by our clients in the cryptoasset space.

This announcement comes after Larry Fink, CEO of BlackRock, stated earlier this year that clients have shown an ‘increasing interests’ for digital currencies including stablecoins as well as ‘the underpinning technologies’ (also known by blockchain).

BlackRock highlighted Thursday’s work by Energy Nonprofits RMI, and EnergyWeb. They work to ‘give greater transparency to sustainable energy use in bitcoin mining’. The firm also said that it ‘will monitor progress on those initiatives.

Although institutional investors were once hostile to the crypto industry, they have since changed their mind. However, environmental concerns surrounding the mining process have remained a problem for many.

According to the post, BlackRock is exploring areas that could benefit clients and capital markets more broadly. These include stablecoins and tokenization.

This is just the latest news from BlackRock’s venture into crypto. The company has approximately $8.5 trillion in assets and recently announced a partnership with coinbase which allows institutional clients to purchase crypto starting with bitcoin.

New institutional investors keen to see a spot-btc exchange-traded fund approved by the Securities and Exchange Commission are also frustrated. Only bitcoin futures ETFs were approved so far.