Blackrock is Evaluating Crypto… but The Rumor Mill Got the Story Wrong

Blackrock is evaluating cryptocurrencies. This news somehow got translated to “Blackrock ready to invest trillions and start a crypto ETF.” The truth is somewhere toward the first point.[1][2]

Here is the most truthful version of the news from Reuters:

Chief Executive Larry Fink on Monday said the world’s largest asset manager has assembled a working group to look at blockchain technology and cryptocurrencies such as bitcoin, but cautioned he does not see massive investor demand.

“We are a big student of blockchain,” Fink said in an interview with Reuters. Adding that he doesn’t see “huge demand for cryptocurrencies,” the company has a working group studying it.

Any move to invest in cryptocurrencies or to use blockchain by BlackRock would mark a pivot for the company and a major institutional endorsement for the insurgent technology. The company managed $6.3 trillion in assets as of June 30.

In other words, its yet another reason to be excited about crypto adoption in the future, but it isn’t a reason to rush to market and spam the buy button today if you aren’t already planning on building a position in crypto.

Like many major financial institutions, they see the value of blockchain, but are standoffish on crypto. If these institutions are preparing on entering the crypto space or building a position (or if they already are) they are clearly still in “stealth” mode.

That said, if you were a major financial institution building a position for whatever reason (a trading desk, an ETF, etc) would you tell your competition and retail investors and thus have to buy higher due to increased competition, or would you be dismissive and dance around the subject while you built your position during the yearly lows?

There really is only one answer there.

Of course, if you really weren’t interested in crypto, and you didn’t think there was demand, would you not also appear disinterested?

Also only one answer there as well.

Meaning, if the future is bright, we do not yet know.

In short, we aren’t at that point yet where Blackrock puts up crypto ETF billboards… of course, if we do one day get to this space, you’ll want to have already built your position (as at that point there will be real reason to celebrate). 😉

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Citations

  1. BlackRock is evaluating cryptocurrencies, CEO Fink says. Reuters.com.
  2. Bitcoin jumps as BlackRock looks into crypto and blockchain. CNBC.com.

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