BlackRock has unveiled a spot Bitcoin private trust targeting institutional clients in the US. This product will provide direct exposure to Bitcoin. BlackRock is the largest digital asset manager in the world, with more than $10 trillion in assets under management.

BlackRock unveils a spot Bitcoin private trust

BlackRock revealed the launch of this new product through a blog post published on Thursday. The asset manager said that despite the ongoing bear market in the crypto space, there was growing interest from institutional clients on how they can be efficient and cost-effective in accessing these assets through technology and product capabilities.

Bitcoin has been on a steep decline this year. Bitcoin currently stands at around 65% below its all-time high. However, analysts believe that the asset has bottomed alongside the stock market, which has also been on a bearish trend. Bitcoin and stocks have become increasingly correlated due to an influx of institutional investments.

In the blog post, BlackRock also explained why it had offered its clients Bitcoin services. The asset manager explained that Bitcoin was “the oldest, largest, and most liquid cryptoassets.” It also added that the asset was receiving interest from clients.

The venture of BlackRock into the Bitcoin space is not surprising. Earlier this year, the CEO of BlackRock, Larry Fink, said that BlackRock clients had shown increased interest in cryptocurrencies and the underlying blockchain technology.

In the blog post, BlackRock also touched on the issue of energy usage in Bitcoin mining activities. The company affirmed that it would follow the work of non-profit energy firms like RMI and EnergyWeb to bolster transparency and monitor their progress.

The recent announcement by BlackRock marks yet another major institutional investor that has changed its tune regarding the crypto industry. However, blockchain projects’ high energy demands continue to hinder some from venturing into the sector.

According to BlackRock, launching this product resulted from research into sectors with the potential to benefit clients and capital markets. Earlier this year, leading financial institutions in the US, such as JPMorgan and Goldman Sachs, unveiled crypto divisions allowing institutional clients to buy Bitcoin and other cryptocurrencies.

BlackRock partners with Coinbase

The product’s launch comes barely a week after BlackRock revealed a partnership with Coinbase, the largest cryptocurrency exchange in the US. Through this partnership, BlackRock announced it would give its clients direct access to crypto assets, with Bitcoin at the top of the list.

The service will be available through the institutional investment platform known as Aladdin. Users can access various services through this platform, including crypto trading, custody, prime brokerage, and reporting capabilities after signing up on Coinbase Prime.

Despite the evident rise in crypto assets in the US, the regulatory framework still lacks clarity. The US Securities and Exchange Commission is currently in charge of crypto regulations. However, the commission has failed to approve a spot Bitcoin exchange-traded fund (ETF), saying crypto prices were subject to manipulation. However, the SEC approved a Bitcoin futures ETF last year.

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