The world's largest asset manager, BlackRock, showed interest in digital assets over a year ago. Now rumors are circulating that the New York-based firm is preparing to launch a crypto trading offering for institutional clients.
BlackRock, the world's largest asset manager with more than $10 trillion in assets under management (AuM), first commented on Bitcoin in November 2020. Even then, CIO Rick Rieder expressed a positive view of the asset class, which he said could replace the classic "safe haven asset" gold. A few months later, the asset manager filed prospects for two funds that allowed them to purchase Bitcoin futures. Now BlackRock wants to go one step further, at least according to three insiders.
Crypto trading for BlackRock clients
Thousands of the asset manager's institutional clients - which include corporate and public pension funds, trusts and sovereign wealth funds - would be given access to trading cryptocurrencies, according to the plans. But beyond that, they would also enable loans with crypto assets as deposited collateral, similar to what is already available in the DeFi space today.
BlackRock has been studying the asset class for quite some time, after all, and is currently reviewing various providers in the field. One of the insiders referred to a working group of around 20 people who are actively working on a crypto strategy. He said that they are impressed by the huge flow of money in the industry and also want a piece of the pie. BlackRock has so far declined to make any official statements on the rumors.
Institutional adoption advances
Recent plans highlight the integration of digital assets into existing institutional financial infrastructure. This can now be seen on a number of fronts. In the United States in particular, quite a few established financial services providers are offering services around digital assets. These include crypto trading, custody and portfolio management offerings. BlackRock does not seem to want to fall behind its colleagues at Goldman Sachs, JPMorgan and Wells Fargo, all of which launched similar crypto services last year.
Anecdotal examples aside, progressive institutional adoption is measurable in terms of three factors: regulation, mass adoption, and macro-environment. Without exception, all three fields have improved over the past year. The most recent drivers of ongoing institutional adoption are the recent Bitcoin ETF approvals in the States and a burgeoning fear of an uncontrollable wave of inflation. The biggest brake on these developments continues to be a sense of uncertainty regarding the regulation of the asset class.
