The BlackRock Trust: Crypto-legitimacy or the beginning of the end for Bitcoin?


After BlackRock, the world’s largest asset manager, announced on August 11 that it would launch a private bitcoin trust for its clients, some crypto enthusiasts said the move could legitimize the digital asset in the eyes of the public. more traditional investors.

BlackRock’s new private trust will make bitcoin available to its institutional clients, tracking bitcoin’s performance, providing direct exposure to the price of the cryptocurrency, and of course, trading options.

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“Despite the sharp decline 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,” said BlackRock said in its press release.

The news comes shortly after the company announced a partnership with Coinbase to provide customers of its Aladdin platform with access to cryptocurrency trading and custody services. These developments highlight how traditional investors and institutions, from banks to hedge funds, are getting into the crypto market, indicating that digital assets are here for the long haul.

These new endorsements give crypto ever-increasing legitimacy, bringing digital assets into the more traditional financial sector and making them more accessible to new and old investors alike.

But does the advocacy of a multinational investment management firm run counter to everything Bitcoin originally stood for? Especially when, five years prior, BlackRock CEO Larry Fink called bitcoin an “index of money laundering.”

Bitcoin’s anarchic beginnings in 2009 heralded the potential democratization of finance. Blockchain technology promised a more open and secure approach to money for everyone. So, with bitcoin now all the rage in traditional Wall Street investment portfolios, has the leading cryptocurrency betrayed its revolutionary roots?

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At the end of June, Coinbase stock was at an all-time low of $47.02. But the announcement of the partnership between BlackRock and Coinbase could be partly responsible for the recent upward trajectory of the crypto exchange’s share price.

But Coinbase shares are still down 75% from their peak, and online skeptics say BlackRock’s once-best-in-game partnership with Coinbase is nothing more than a power grab. by a centralized financial institution.

And with the added possibility of new regulations from the US Congress, the news further fuels fears that the current crypto winter may not be fleeting, but the beginning of the end for Bitcoin.

As is always the case with the market, only time will tell.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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