BlackRock is the world’s largest asset manager. According to the latest reports, it is all set to enter the cryptocurrency market. It is said to be planning to do this by offering a Trading Bitcoin service to its clients. The firm manages more than $10 trillion in assets for its institutional investors.
This development is seen as a watershed moment for the crypto market. So how will the assets management giant make relevantinvestmentproducts availableto its clients?
Loans with Crypto as Collateral
According to an industry insider, BlackRock will allow its clients to avail loans against cryptocurrency. This will be supported by their own credit facility and client support trading.
The firm has more than 1,500 institutional clients, including:
- Corporations
- Foundations
- Endowments
- Public pensions
- Sovereign wealth funds
Once the company enters the crypto market, its clients will be able to trade Bitcoin, Ethereum, and other coins through its integrated investment software.Its popular software is known as Aladdin.If the asset manager takes the crypto market leap, this may also turn out to be one of the largest Bitcoin Trading Platform.
In another prediction, it is claimed that the firm is going to get directly involved with crypto. In order to do so, it is seekingproviders in the crypto space.
There is another report that the company has already appointed a team that is assessing BTC and other cryptos in the market. This team is following the flow of digital currencies for the competition.The company is keeping track of all the flow that everyoneelse is experiencing and seeks to start driving profits from this.
Around a month ago, BlackRock had made a filing with the U.S. Securities and Exchange Commission (SEC)in order to offer an exchange-traded fund (ETF) with investments in companies engaged in crypto and blockchain technologies.Besides, the company also has a stake in MicroStrategy, the largest corporate investor in BTC.
Bitcoin’s Recent Surge
Bitcoin has undergone relatively steady growth through February. The overall crypto market gained around $300 billion in value since its low of January. Bitcoin’s price still hovers around 40% down from its peak of November 2021. Ether, Solana, BNB, XRP, and Cardano are also far away from their peaks.With BlackRock’s entry into this market, the Bitcoin and altcoin market is expected to get a much-needed boost.
BlackRock Began Studying Bitcoin Years Ago
Blackrock’s CEO had announced in May 2021 about the company studying Bitcoin if it was possible for it to provide countercyclical benefits. The company also explored the possibility of cryptos playing a role in long-term investment as an asset class.
Last year, the firm made attempts for bitcoin investment through derivatives-based products. It was revealed through a filing with the SEC, showing thatthe asset manager was exploring products on the Chicago Mercantile Exchange (CME). This was around the time when Bitcoin crossed the $51,000 mark for the first time.
Even before this, in December 2020, BlackRock’s CEO had announced the massive growth in search volume for ‘bitcoin’ on their website. This was seen by the company as a growing legitimacy. The firm seems to have beeninterested in Bitcoin and other cryptocurrenciesfor some years now.
Cryptocurrencies & Other Wall Street Giants
In 2021, many other Wall Street giants have been drawn to cryptos amid massive growth in interest and demand from clients. Most of them have maintained a cautious approach and have indicated their interest in regulatory developments. Last year was a big year for Bitcoin and the overall crypto market.
- Bank of America allowed bitcoin futures trading for certain clients when Goldman Sachs put its crypto trading desklive after a gap of 3 years.
- In another development, JPMorganallowed its clients access to crypto funds. All the while its CEO maintained a skeptical tone for crypto and Bitcoin.
- The first US bitcoin futures ETF was launched in October 2021 and this made a big impact on the acceptance of BTC and cryptos on Wall Street.
- Just a week ago, KPMG Canada announced investing in BTC and ETH.
BlackRock has many factors in its favor that are expected to help it grow. This includes its revenue mix, board product diversification, and progressively improving assets. The company has maintaineda CAGR of 9.2% in its GAAP revenues for the past 7 years.Both BlackRock and the cryptocurrency market are expected to complement each other’s growth onceit becomes actively engaged.