BlackRock has been quietly building and advising across the digital asset spectrum. As the largest asset manager in the world, to the tune of $6T, they’ve built an internal digital asset team, published several crypto asset white papers, and have been closely advising Coinbase (and other crypto exchanges) for better than 18 months. When the term ‘institutional’ is used in the crypto ecosystem you could simply use the BlackRock logo in its place. They define the term in finance.
Take a look at the latest additions to the BlackRock movement in digital assets via Forbes:
“On Tuesday, BlackRock, the largest asset manager in the world with $6 trillion under management, said it would undergo a massive management overhaul, in part reorganizing to focus on alternative investments. And while BlackRock declines to comment on any plans for large forays into crypto assets, it recently hired former Ripple product marketer Robbie Mitchnick to its Digital Wealth team, which uses the firm’s successful Aladdin global asset management software to build institutional portfolios. Last summer, Mitchnick and Stanford Business School professor Susan Athey published a paper called “A Fundamental Valuation Framework for Cryptoassets,” which essentially laid out a sophisticated model for valuing cryptocurrencies bitcoin and XRP.”
These are some of the first public markers as to BlackRock’s serious interest and work with respect to Bitcoin and other crypto assets. And from what we are hearing, they’ve taken a unique interest in Bakkt’s pending launch and operations as well.
Once Bakkt launches they are considering a Series B round of funding and BlackRock has a legitimate interest in taking a piece of that round. Not that this is a surprise, but BlackRock is known for eschewing founding or Series A rounds and generally prefer later rounds that have evolved via the ‘proof of concept’ of any business.
That also assumes that any digital asset participation for institutional clients would include using Bakkt’s infrastructure to clear trades. While we’ve yet to get any solid confirmation on that, it does pass the sniff test.
Whatever BlackRock’s intentions are with respect to digital assets, the fact that they are formulating some level of involvement is extraordinary and only adds to the ‘institutional fomo’ narrative.
As always, with respect to firms like BlackRock and global investment banks, watch what they do, not what they say. Very, very interesting.