Crypto legitimacy or the beginning of the end for Bitcoin?
After BlackRock, the world’s largest asset manager, announced on August 11 that it would launch a private bitcoin trust for its clients, some crypto enthusiasts said the move could legitimize the digital asset in the eyes of more traditional investors.
BlackRock’s new private trust will make bitcoin available to its institutional clients, track bitcoin’s performance, offer direct exposure to the price of the cryptocurrency and, of course, trading options.
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“Despite the sharp decline in the digital asset market, we continue to see significant interest from some institutional clients in how they can efficiently and cost-effectively access these assets using our technology and product capabilities,” BlackRock said in its press release.
The news comes shortly after the firm announced a partnership with Coinbase to provide customers of its Aladdin platform with access to cryptocurrency trading and custody services. These developments highlight how traditional investors and institutions from banks to hedge funds are moving into the crypto market, indicating that digital assets are here for the long haul.
These fresh recommendations give crypto increasingly stronger legitimacy, bringing digital assets into the more traditional financial industry and therefore making them more accessible to new and old investors alike.
But does prosecution by a multinational investment management firm go against everything Bitcoin originally stood for? Especially when BlackRock CEO Larry Fink, just five years earlier, called bitcoin an “index of money laundering.”
Bitcoin’s anarchic beginnings in 2009 heralded the potential democratization of finance. Blockchain technology promised a more open and secure approach to currency for everyone. So with bitcoin now trending in mainstream Wall Street investment portfolios, has the leading cryptocurrency betrayed its revolutionary roots?
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At the end of June, Coinbase’s stock was at an all-time low of $47.02. But the announcement of BlackRock and Coinbase’s partnership may be partially responsible for the recent upward trajectory of the crypto exchange’s share price.
But Coinbase shares are still down 75% from their peak, and online skeptics feel BlackRock’s partnership with once-top-play Coinbase is nothing more than a power grab by a centralized financial institution.
And with the added possibility of new regulations from the US Congress, the news further fuels fears that the current crypto winter is not fleeting, but the beginning of the end for Bitcoin.
As is always the case with the market, only time will tell.
