Blackrock launches a private trust to invest in bitcoin: it's the first time

Despite the severe virtual currency crisis, the group announced a partnership with Coinbase to offer American institutional clients direct exposure to cryptoassets.

12 Aug 2022

Domenico Aliperto

BlackRock, the world's largest asset manager, has launched a private trust that gives institutional clients (for now only in the US) direct exposure to bitcoin. This is BlackRock's first product of its kind and comes at a time when cryptocurrencies are experiencing a very strong crisis.

Interest from institutional investors is growing

"Despite the sharp decline in the digital asset market, we are still seeing considerable interest from some institutional clients," the group commented in a post on the company's blog. "Bitcoin is the  longest-running, largest and most liquid cryptoasset and is currently the main object of interest of our clients in the cryptoassets space."

The company, which has about $8.5 trillion in assets under management, announced in early August a partnership with Coinbase that allows its institutional clients to buy cryptocurrencies, starting with bitcoin. BlackRock will leverage the exchange platform (heavily hit by the virtual currency crisis) to offer institutional investors access to cryptocurrencies through the Coinbase Prime service. Just a year ago, BlackRock CEO Larry Fink said he saw little demand for digital assets. Earlier this year, the CEO claimed that BlackRock's customers had shown "growing interest" in digital currencies, including stablecoins and "underlying technologies," starting with blockchain.

Institutional investors, once hostile to the cryptocurrency industry, have indeed gradually changed their minds in recent years, but environmental concerns related to the bitcoin mining process have continued to be an obstacle for many, although Blackrock recalls the work of nonprofit energy organizations Rmi and EnergyWeb.  "to bring greater transparency to the sustainable use of the energy used in bitcoin mining."