Yet another nail in the BTC non-believer's coffin. OUCH!!
BlackRock Reverses Course on Crypto, Partners With Coinbase to Offer Bitcoin to Investors
Tuesday, August 16, 2022 02:34 PM | Kyle Depontes
Coinbase Partnership
One of the most well-known firms to embrace Bitcoin in recent weeks is BlackRock (BLK), the world's largest asset manager which was reported to have over $10 trillion under management as of January 2022.
Although BlackRock has challenged the rise of Bitcoin at every step of the way, the company recently sent shockwaves through the financial world by announcing in a blog post that it had partnered with the cryptocurrency exchange Coinbase (COIN) to make Bitcoin directly available to institutional investors.
As a result of the deal, mutual customers of Coinbase and BlackRock’s investment management platform, Aladdin, will have access to crypto trading, custody, reporting capabilities, and prime brokerage.
Customer access will be granted through Coinbase Prime, a platform that BlackRock and Coinbase will build out in phases.
Speaking about the deal, Joseph Chalom, global head of strategic ecosystem partnerships at BlackRock, said, “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.”
Private Trust
Almost a week later, BlackRock announced that it would launch a private trust which would give US-based institutional clients exposure to spot Bitcoin.
The trust will be BlackRock's first product that offers direct exposure to the price of Bitcoin.
In a statement, the company 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."
The global asset manager has revealed that it has four main areas of interest regarding digital tokens: permissioned blockchains, stablecoins, crypto assets, and tokenization.
BlackRock's Crypto Timeline
While BlackRock has finally decided to enter the crypto markets, the company's path toward Bitcoin adoption was anything but smooth.
2017: Opposition to Crypto
In October 2017, Larry Fink, the co-founder and CEO of BlackRock, was quoted saying the digital token was nothing more than an “index of money laundering.”
Fink added, “Bitcoin just shows you how much demand for money laundering there is in the world. That’s all it is.”
At this point, Bitcoin's price hovered around $4,800.
2021: Sentiment Begins to Change
March
BlackRock's tune began to change early in 2021 when the company's CIO of global fixed income Rick Rieder revealed that the asset manager had begun to buy BTC.
Although Rieder refused to provide the specific allocations that BlackRock had put towards Bitcoin, he did mention that the coin could serve as a hedge against inflation.
Rieder said, “I think crypto generally has gotten the imagination of a lot of people. Today, the volatility of it is extraordinary, but listen, people are looking for storehouses of value. People are looking for places that could appreciate under the assumption that inflation moves higher and that debts are building, so we’ve started to dabble a bit into it.”
Later filings, such as a March 31 disclosure, stated that the BlackRock Global Allocation fund had gained exposure through CME's Bitcoin futures product - buying 37 units of CME's March 2021 bitcoin futures at the beginning of the year.
July
Despite BlackRock's first BTC purchases in 2021, CEO Larry Fink's BTC stance remained unchanged.
In an interview with CNBC in July, Fink said the asset manager had seen "very little demand for digital assets."
Fink also took a veiled shot at Bitcoin investors, stating that "clients interested in crypto or other volatile assets like meme stocks may not be BlackRock's clientele."
October
By the end of the year, Fink's tone began to soften on cryptocurrency. In an interview in October, Fink said that he could see a role for either Bitcoin or a digital dollar in the global financial system.
Fink seemed cautiously optimistic, saying, "I’m not a student of Bitcoin and where it’s going to go, so I can’t tell you whether it’s going to go to $80,000 or zero, but I do believe there’s a huge role for a digitized currency and I believe that’s going to help consumers worldwide.”
2022: BlackRock Expands BTC Offering
The difference between genius and stupidity is, Genius has its limits.
Albert Einstein
