BlackRock and Bitcoin
Bitcoin has seen great growth this week, and a lot of that has been due to a plethora of news that benefit the cryptocurrency market in general. One of the major pieces of news was a rumor of investment management company BlackRock putting together a special team to explore possibilities of adding cryptocurrencies to their investment options. As per usual with crypto news, there has been misinformation spreading about this particular development, so I want to clear things up for anyone who doesn’t know the whole picture.
What is BlackRock? BlackRock is a huge asset management service that handles more than 6 trillion USD (WAY more than the Bitcoin market cap). BlackRock CEO, Larry Fink, has had a rocky relationship with Bitcoin in the past. Earlier this year, he said that Bitcoin was, “…more an index of money laundering” than anything else. This is why people were surprised when news broke that BlackRock was creating a working group to look into cryptocurrencies and Blockchain, the technology that underpins them.
This is pretty great news, but it’s being told a couple of years too late the company clarified themselves, saying, “Like most financial institutions, BlackRock has had a working group since 2015 that meets periodically to exchange information on blockchain and consists of employees from various parts of the business,” the company said. “We have been looking at blockchain technology for several years, recognizing potential for shared processes and data across market participants, clearing, settlement and reconciliation and simplified securities issuance.” Fink confirmed this, and also adding, “I don’t believe any client has sought out crypto exposure”. This reversal of opinions on Bitcoin is very similar to the situation we had with Jamie Dimon, who had a similar change of heart.
So this can’t be good news right? This team has been around for years, and Fink claims that his clients aren’t even interested in crypto! I would disagree. The fact that we have confirmation that one of the biggest asset management companies is looking into crypto is probably more impactful than the research that they are actually doing. As for there being zero client interest in cryptocurrencies, I find that hard to believe. Only time will tell if BlackRock will do anything crazy with cryptocurrencies, but If Bitcoin has proven anything, it is that it will not be ignored.