Why is the adoption of BlackRock so important for bitcoin?

Written by ebookingservices

The bullish trend of bitcoin (BTC) in recent weeks has received an additional boost from institutional investment. The alliance between Coinbase and the investment manager Blackrock, along with the fact that it has announced the launch of a bitcoin cash trust, has not only boosted the price of the main cryptocurrency, it has also made bitcoin more attractive in the eyes of investors.

Created in 1988, Blackrock managed in just 10 years to raise assets under management to USD 6 billion, and thanks to a aggressive strategy of mergers and acquisitions, especially in the area of ​​exchange-traded funds (ETFs), its portfolio of managed assets is the largest in the world and exceeds USD 10 trillion.

Blackrock’s interest in bitcoin is not new. In August 2021 he announced investments in bitcoin mining companies, and already in January of that year he had included derivatives of BTC among its investment instruments. Also, in March 2021, the company acquiredbitcoin futures contracts for $6.5 million.

As the company indicated when announcing its agreement with Coinbase to offer bitcoin exposure to your clientsthe decision was motivated by the growing interest of institutional clients in the first cryptocurrency and who seek assistance with the lifecycle management of those digital assets. Shares of Coinbase rose above 80% in the days following the announcement of the Blackrock deal.

Opportunities for bitcoin growth

Institutional investments in bitcoin made remarkable progress in 2020 as companies like microstrategy and Block incorporated bitcoin as part of their strategic reserve, as reported by CriptoNoticias.

The opportunity to access direct exposure to BTC with mediation from blackrock, it makes it easy for traditional investors to trade that cryptocurrency through regulated investment instruments.

Blackrock would also be opening the door for states, through central banks, to invest in bitcoin. CEO of Digital Currency Group Barry Silbert claimed that Blackrock’s bitcoin trust makes it easier and faster for central banks to invest in bitcoin.

in these statements de Silbert, who runs the operations of Grayscale’s bitcoin fund, he referred to Blackrock’s dealings with central banks, suggesting that they might decide to invest in bitcoin.

With access to bitcoin-based trust funds, futures contracts and other BTC derivatives, the investor does not need to enter the bitcoin spot market, but rather focuses his exposure to this asset on the instruments he knows well in his investment activities. . The importance of Blackrock in this context is that it can attract more capital to bitcoin by encouraging more incorporation of institutional investors.

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