BlackRock launches private trust to give clients exposure to spot bitcoin

BlackRock has launched a private trust offering institutional clients in the US direct exposure to bitcoin.

The largest asset manager in the world revealed the new product in a blog post on Thursday, although it was light on details.

“Despite the sharp decline in the digital asset market, we continue to see significant interest from some institutional customers in how they can efficiently and cost-effectively access these assets using our technology and product capabilities,” the company said in the post.

Bitcoin is still more than 60% below its all-time high of nearly $69,000. However, many investors believe they have found a bottom with stocks, where the two asset classes are more correlated to each other this year than ever before, amid 2022’s fall in risk assets. On Thursday, the digital currency rose above $24,700 to its highest level since just before falling to its lowest level in June.

“Bitcoin is the oldest, largest and most liquid crypto-asset, and is currently the primary topic of interest from our clients in the crypto-asset space,” the post continued.

The announcement follows CEO Larry Fink saying earlier this year that BlackRock clients had shown “increasing interest” in digital currencies, including stablecoins and “the underlying technologies” – also known as blockchain.

BlackRock on Thursday also highlighted the work of energy organizations RMI and EnergyWeb for their work “to bring greater transparency to sustainable energy use in bitcoin mining,” adding that the firm “will monitor progress around these initiatives.”

Institutional investors who were once hostile to the crypto industry have changed their tune in recent years, but environmental concerns surrounding the process of bitcoin mining have remained a stumbling block for many.

The filing said BlackRock has been researching areas with “potential to benefit our clients and capital markets more broadly,” including permissioned blockchains, stablecoins, cryptoassets and tokenization.

Thursday’s news is the latest in BlackRock’s foray into crypto. The company, which has about $8.5 trillion in assets under management, recently announced a partnership with Coinbase that allows its institutional customers to buy crypto, starting with bitcoin.

This also comes amid frustration from new institutional investors in the market who are eager to see the Securities and Exchange Commission approve a spot bitcoin exchange-traded fund. So far, only bitcoin futures ETFs have been approved.