The move comes one week after its partnership with Coinbase to provide institutional clients with crypto trading access.
According to a blog post published on Thursday, BlackRock — the world’s largest asset manager, overseeing over $10 trillion in total assets — has launched a new private spot Bitcoin (BTC) trust. The fund is only available to U.S. institutional investors and seeks to track the performance of Bitcoin, less the expenses and liabilities of the trust. In explaining the decision, BlackRock said:
“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. Bitcoin is the oldest, largest and most liquid digital asset and is currently our clients’ primary subject of interest within the digital asset space.”
Private investment trusts that do not solicit investments from retail investors do not need to register with regulatory authorities in the United States. But others, such as the Grayscale Bitcoin Trust, can still become publicly traded — though not Securities and Exchange Commission-registered — on the over-the-counter markets.
Excluding stablecoins, Bitcoin maintains close to 50% of the industry’s market capitalization. With regard to the blockchain’s energy use, BlackRock said it’s encouraged by organizations such as RMI and Energy Web, which are developing programs to bring greater transparency to sustainable energy utilization in Bitcoin mining.
Last week, BlackRock partnered with cryptocurrency exchange Coinbase to provide its clients with direct assess to crypto, starting with Bitcoin. Users of BlackRock’s institutional investment management platform, Aladdin, will receive crypto trading, custody, prime brokerage and reporting capabilities upon signing up for Coinbase Prime. On a broader level, BlackRock stated that it has been conducting research in four areas of digital assets — permissioned blockchains, stablecoins, crypto assets and tokenization — and their associated ecosystems.