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World’s Largest Asset Manager BlackRock Launches Spot Bitcoin Private Trust

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After announcing it would enable bitcoin trading services, $10 trillion BlackRock now offers spot bitcoin exposure to institutions in a private trust.

  • BlackRock has launched a spot bitcoin private trust for institutions.
  • Earlier this month, BlackRock announced a partnership with Coinbase to offer bitcoin trading service to its clients.
  • Last year the $10 trillion asset manager stated they were not aware of any institutional interest in bitcoin.

BlackRock Inc., the world’s largest asset manager with $10 trillion of assets under management (AUM), has launched a spot bitcoin private trust enabling direct BTC exposure for its institutional clients, per a statement from the company.

“Bitcoin is the oldest, largest, and most liquid cryptoasset, and is currently the primary subject of interest from our clients within the cryptoasset space,” per the statement.

The news comes on the heels of another Bitcoin-related announcement by BlackRock. Earlier this month, the asset manager announced a partnership with Coinbase allowing its clients to trade bitcoin. However, in this partnership, BlackRock’s clients would not be able to physically interact with bitcoin outside of the Coinbase Prime platform which would hold custody of the institution’s assets.

“Leveraging Coinbase’s comprehensive trading, custody, prime brokerage and reporting capabilities, common clients will be able to manage their bitcoin exposures alongside their public and private investments,” BlackRock said at the time of the announcement.

In the same vein, BlackRock’s institutional bitcoin trust will not support the custodial transfer of bitcoin. However the value of the trust will be derived from bitcoin’s spot price and the asset manager will likely once again leverage a custodial partner.

Moreover, the launch of a spot bitcoin trust for institutions marks a stark reversal from statements made last year by Larry Fink, the CEO of BlackRock.

“In my last two weeks of business travel not one question has been asked about that,” Fink said in reference to institutional interest in bitcoin.

Nevertheless, institutional investors have decidedly made a correction as BlackRock stated in its Bitcoin trust announcement:

“Despite the steep downturn in the digital asset market, we are still seeing substantial interest from some institutional clients in how to efficiently and cost-effectively access these assets using our technology and product capabilities,” reads the release.

Coinbase Partners With World’s Largest Asset Manager Blackrock to Give Aladdin Clients Access to Cryptocurrencies

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Coinbase Partners With the World’s Largest Asset Manager Blackrock to Give Aladdin Clients Access to Cryptocurrencies

On August 4, the head of Coinbase Institutional, Brett Tejpaul, and the vice president of institutional product, Greg Tusar, announced that Coinbase has been selected by the financial giant Blackrock to provide the firm’s Aladdin platform access to cryptocurrencies.

Blackrock Chooses Coinbase to Connect Aladdin Clients to Crypto

Coinbase’s institutional arm will help the world’s largest asset manager, Blackrock (NYSE: BLK), provide Aladdin’s institutional clients with access to digital currencies. The company noted that Blackrock chose Coinbase due to the firm’s “scale, experience, and integrated product offering.” The publicly traded company Coinbase (Nasdaq: COIN) has a long history in the crypto space since it was founded in 2012 by Brian Armstrong and Fred Ehrsam.

Coinbase Partners With World’s Largest Asset Manager Blackrock to Give Aladdin Clients Access to Cryptocurrencies

The New York-based multinational investment management corporation Blackrock is one of the largest financial institutions worldwide. Blackrock deals with roughly $10 trillion in assets under management (AUM) recorded in 2021. Coinbase considers the partnership with Blackrock and Aladdin a “milestone” for the crypto asset company. The Aladdin platform stands for the Asset, Liability, Debt, and Derivative Investment Network and it’s an investment management and trading platform designed specifically for Blackrock’s institutional clients.

“Blackrock and Coinbase will continue to progress the platform integration and will roll out functionality in phases to interested clients,” Tejpaul and Tusar wrote on Thursday. In mid-June, Rick Rieder, chief investment officer (CIO) of global fixed income at Blackrock, explained that cryptocurrencies like bitcoin (BTC) are durable assets. In April, Blackrock launched a blockchain exchange-traded fund and Blackrock was named “a primary asset manager of USDC cash reserves” the same month.

Blackrock Exec: ‘Institutional Clients Are Increasingly Interested in Gaining Exposure to Digital Asset Markets’

Joseph Chalom, the global head of strategic ecosystem partnerships at Blackrock, remarked that Blackrock’s clientele has been gravitating toward digital currencies. “Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets,” Chalom said on Thursday. The Blackrock executive added:

This connectivity with Aladdin will allow clients to manage their bitcoin exposures directly in their existing portfolio management and trading workflows for a whole portfolio view of risk across asset classes.

Following the Coinbase and Blackrock partnership announcement, COIN shares increased more than 16% higher during the morning trading sessions on Thursday (EST). However, COIN is down ​​72.46% in value from the stock’s all-time price high. Moreover, at the end of June, Goldman Sachs downgraded COIN to a sell rating.

The news follows the alleged U.S. Securities and Exchange Commission (SEC) probe reported on July 25, and the company’s recent European expansion. In mid-June, Coinbase also revealed it had to cut back 18% of the firm’s workforce to “ensure [Coinbase stays] healthy during this economic downturn,” according to the company’s co-founder and CEO Brian Armstrong.

What do you think about Coinbase partnering with Blackrock and integrating with the firm’s Aladdin platform? Let us know your thoughts about this subject in the comments section below.

BlackRock To Offer Bitcoin Trading, Custody In Coinbase Partnership

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The $10 trillion asset manager will leverage Coinbase Prime to offer bitcoin trading and custody services to institutional investors.

  • BlackRock will begin offering bitcoin trading and custody services.
  • The asset manager is partnering with Coinbase to facilitate trading desk and custodial operations for its institutional clients.
  • Coinbase Prime will act as the custodian and it does not seem to have external wallet transfer functionality.

BlackRock, the world’s largest asset manager with over $10 trillion in assets under management (AUM), is launching bitcoin trading services for institutional clients in a new partnership with Coinbase, per a blog post from the exchange.

Coinbase will leverage its institutional brokerage platform Coinbase Prime to provide BlackRock’s end-to-end investment management platform Aladdin direct access to bitcoin trading and custody.

“Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets,” said Joseph Chalom, global head of strategic ecosystem partnerships at BlackRock, per the blog post.

“This connectivity with Aladdin will allow clients to manage their bitcoin exposures directly in their existing portfolio management and trading workflows for a whole portfolio view of risk across asset classes,” Chalom added.

Bitcoin acquired through this integration will be held in custody with Coinbase Custody Trust Company, a regulated fiduciary in New York. On behalf of its clients, Coinbase Custody holds assets in cold storage and is insured for up to $320 million. While users of Coinbase Prime can transfer funds between wallets, they can only do so internally, which means that transferring bitcoin off the platform currently does not seem to be an option.

BlackRock serves over 1,600 institutions across the U.S. and Canada. The investment manager’s interest in bitcoin was made apparent in February as reports on its imminent entrance into the ecosystem started to emerge.

At the time, a person familiar with the matter said, “They see all the flow that everyone else is getting and want to start making some money from this.”

Circle Partners With New York Community Bancorp — Bank to Custody USDC Reserves

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Circle Internet Financial has revealed a usd coin custody partnership with the American bank holding company New York Community Bancorp (NYCB). Under the agreement, NYCB’s subsidiary, New York Community Bank, will become a custodian for the company’s stablecoin reserves.

Circle Partners With New York Community Bancorp

On Tuesday, Circle announced that it is collaborating with NYCB, the parent company of the U.S. Bank National Association. According to the announcement, NYCB’s subsidiary, New York Community Bank, will custody reserves for Circle’s popular stablecoin usd coin (USDC).

USDC is the second largest stablecoin today with a $53.9 billion market capitalization. During the past 24 hours, Circle’s USDC stablecoin has seen $5 billion in global trade volume. New York Community Bank will also work with Circle in order to provide unbanked communities with access to low-cost financial solutions.

The companies’ strategies will leverage blockchain solutions and stablecoin systems. Solutions include the allocation of USDC dollar-denominated reserves to Minority Depository Institutions Programs (MDIs) and community banks. Dante Disparte, the chief strategy officer and head of global policy for Circle, explained that the future of money will be more inclusive.

“If we want to make the future of money and payments more inclusive than the past, we have to build new partnerships and connections at the community level,” Disparte remarked in a statement.

Circle’s chief strategy officer added:

By partnering with NYCB, we are opening up new pathways for community banks and MDIs across the country to be key participants in the fast-growing digital assets market.

Circle Wants to Improve Financial Inclusion — Blackrock and BNY Mellon Also Handle USDC’s Reserve Management and Custodial Services

On November 17, 2021, Disparte wrote a blog post that explained how Circle wants to “[improve] financial inclusion and economic prosperity for all.” The post discusses working with community banks and MDIs, and the concept of “raising global economic prosperity through the frictionless exchange of financial value.”

The partnership with NYCB follows Moneygram launching a USDC crypto-to-cash program in specific markets. Furthermore, Circle recently launched USDC on the Polygon blockchain network and issued a second major stablecoin backed 1:1 with the euro.

Andrew Kaplan, the executive vice president and chief digital bank and banking as a service officer at NYCB said that the financial institution was “proud to be a leading digital asset innovator among U.S. banks.”

“We are thrilled that together with being a custodian for USDC reserves, we are also able to partner with Circle on meaningful initiatives to impact inclusion and education to our communities and customers,” Kaplan concluded.

In addition to NYCB, the financial giants Blackrock and BNY Mellon have partnered with Circle as well. Blackrock was named “a primary asset manager of USDC cash reserves,” and America’s oldest investment bank BNY Mellon was also revealed as a USDC custodian last April.

What do you think about Circle’s partnership with NYCB? Let us know what you think about this subject in the comments section below.

Blackrock’s CIO: Bitcoin and Crypto Are Durable Assets — Prices Will Move Higher

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Blackrock's CIO: Bitcoin and Crypto Are Durable Assets — Predicts Prices Will Move Higher

The chief investment officer of global fixed income at Blackrock, the world’s largest asset manager, says bitcoin and crypto are durable assets. “I think there’s a healthy recalibration going on,” he said, noting that “if you look two to three years hence, they will be higher than today.”

Blackrock’s Executive on Bitcoin and Crypto

Rick Rieder, chief investment officer (CIO) of global fixed income at Blackrock, shared his view on bitcoin and cryptocurrency in an interview with Yahoo Finance Live on Thursday. Blackrock is the world’s largest asset manager with about $10 trillion in assets under management (AUM).

Rieder was asked how the crypto market is going to react as the Federal Reserve begins tightening aggressively. The Fed hiked its benchmark rate by 75 basis points this week — the largest increase since 1994.

The CIO explained: “I think people underestimate. When you leave rates at such low levels for such an extensive period of time … when you keep policy too easy, the leverage builds in the system slash ‘how do I capture return quickly’ — and you are seeing a lot of the leverage that was built up around crypto come unglued pretty darn quickly.”

However, he emphasized:

I still think bitcoin and crypto are durable assets. It’s a durable business, but there was so much excess built around it.

Rieder described: “It’s not terribly dissimilar from the internet bubble … if you go back to the ’99 and 2000, was the internet a bad idea? No, it wasn’t a bad idea. But you created so much excess around it and you just have to de-gear that dynamic, and I think we are seeing that today.” He noted: “Markets go down five times faster than they go up … That’s why you were seeing this incredible unwind.”

While reiterating that he still thinks bitcoin and crypto are durable assets that are “going to go on,” the Blackrock executive opined:

I think there’s a healthy recalibration going on. It’s a question of how much that recalibration is going to go.

When asked about the prices of major cryptocurrencies, he admitted that for crypto: “It’s pretty hard when there is no true intrinsic value. So, what is it worth? It’s worth what the next person will pay.”

He continued: “My sense is, in all these situations, you overshoot, and my guess is you have probably got some downside to go from here. But it’s hard to say what fair value is.” The Blackrock chief investment officer further shared:

My sense is like a lot of assets, if you look two to three years hence, they will be higher than today.

“But it could overshoot on the downside. This is hard to figure out, just like gold, because I can’t figure out my free cash flow multiple and what my security is underneath it,” he concluded.

Rieder has made some pro-bitcoin comments in the past. In November 2020, he said cryptocurrency is here to stay, noting that bitcoin could replace gold. He also said BTC is “so much more functional than passing a bar of gold around.” In September last year, he revealed that he owns “a small piece of bitcoin,” emphasizing: “I like assets that are volatile that have upside convexity. I could see bitcoin go up significantly.”

What do you think about the comments by Blackrock’s chief investment officer? Let us know in the comments section below.