World asset manager BlackRock has reportedly started a new private spot Bitcoin (BTC) trust which is basically of service to institutional clients in the United States.
The fund, which is solely open to institutional investors in the United States, aims to monitor the performance of Bitcoin after deducting costs and obligations associated with the trust. In a statement defending the choice, BlackRock said:
“Despite the steep downturn 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. Bitcoin is the oldest, largest, and most liquid digital asset and is currently our clients’ primary subject of interest within the digital asset space.”
Private investment trusts are exempt from American regulatory agencies’ registration requirements if they do not solicit investments from ordinary investors. Others, however, like the Grayscale Bitcoin Investment Trust, may still be listed for public trading on over-the-counter platforms despite not being registered with the SEC.
Stablecoins aside, Bitcoin continues to hold close to 50% of the market capitalization of the sector. BlackRock claims that groups like RMI and Energy Web, which are creating initiatives to increase transparency in sustainable energy consumption in Bitcoin mining, are supportive of the blockchain’s energy usage.
BlackRock and cryptocurrency exchange Coinbase teamed together last week to offer their clients direct access to cryptocurrencies, starting with Bitcoin.
When they join up for Coinbase Prime, users of BlackRock’s Aladdin institutional investment management platform will get access to cryptocurrency trading, custody, prime brokerage, and reporting features.
BlackRock claims to have been researching four categories of digital assets and the ecosystems that surround them. These include tokenization, crypto assets, stablecoins, and permission blockchains.
