Today BlackRock announced the launch of a private bitcoin trust – similar to the Grayscale Bitcoin Trust, which currently trades at a 31% discount to the net asset value. The trust will only be available to U.S. institutional clients. To date, the SEC has not given the go-ahead for Bitcoin spot ETFs. That means other than direct crypto exposure, the low friction options are a trust or a futures-based ETF.
The BlackRock news comes a week after it announced an integration with the cryptocurrency exchange Coinbase to allow institutional clients to manage crypto exposures alongside mainstream portfolio investments. It also launched a blockchain-themed ETF in April, which has attracted just $7.5m in investment so far.
Given that bitcoin uses the energy-hungry proof of work, BlackRock had a sort of disclaimer on the sustainability front. It said it’s encouraged that RMI and Energy Web (co-founded by RMI) are working on transparency around renewable energy usage by bitcoin miners.
The world’s largest asset manager also highlighted its four-pronged approach to digital assets, with crypto-assets being just one aspect. The others are permissioned blockchains, stablecoins, and tokenization.
In April, it invested in stablecoin firm Circle to explore using USDC for capital market transactions.
In terms of permissioned blockchain, BlackRock is part of the iCapital-led consortium planning to use enterprise blockchain as the golden record of transactions in the alternative investment sector. It’s a backer of securities lending platform EquiLend, which has a similar initiative and is also a participant in Axoni’s equity swaps network.