Blackrock, the US-based multinational investment management company has announced the launch of the Bitcoin Private Trust in its latest announcement. This newly launched product focuses on spot bitcoin and is available only for institutional clients based in the U.S.A. This trust will track the performance of Bitcoin, less expenses and liabilities of trust as the firm has noticed significant interest among its client base who wish to use Blackrock’s technology and product capabilities to efficiently and cost-effectively access Bitcoin. This move comes less than a week after the firm announced its partnership with the NASDAQ-listed cryptocurrency exchange — Coinbase.
This partnership between the two parties will allow common clients who hold accounts in both Alladin and Coinbase access to the digital assets trading lifecycle through connectivity between the two platforms starting with Bitcoin. The newly launched Bitcoin trust will leverage Coinbase’s comprehensive trading, custody, prime brokerage and reporting capabilities to help clients see better management of their bitcoin exposure alongside their public and private investments. This is not the first major rodeo by the firm into the cryptocurrency and blockchain ecosystem as it launched a blockchain ETF in April earlier this year.
Blackrock CEO Lary Fink had said in his statement earlier this year that “ Blackrock is studying digital currencies, stablecoins and underlying technology to see they can help serve the firm’s clients and war in Ukraine could accelerate the adoption of digital currencies”. In a letter to shareholders, he mentioned that “A global digital payment system can enhance the settlement of international transactions and reduce the risk of money laundering. Digital currencies can also help bring down costs of cross-border payments, for example when expatriate workers send earnings back to their families”. These factors he believes could lead to many countries reconsidering their currency dependencies.
The firm believes Bitcoin’s potential as it is encouraged by the actions of organisations such as RMI and Energy Web which are developing programs to bring greater transparency to sustainable energy usage in bitcoin mining. The firm also mentioned that it has been researching four areas of digital assets and their associated ecosystems where it sees potential to benefit clients and capital markets more broadly such as permissioned blockchains, stablecoins, crypto assets, and tokenization.
