BlackRock, the World’s Largest Asset Manager Plans Crypto Trading Services for Clients

The world’s largest asset manager BlackRock is now planning to offer crypto trading services to its institutional clients as per the latest report. BlackRock currently manages a staggering $10 trillion in assets under management.

Thus, if BlackRock were to introduce crypto trading services we can expect a massive liquidity flush in this booming cryptocurrency market. Three people familiar with the matter said that BlackRock plans to enter the cryptocurrency space with “client support trading and then with their own credit facility”.

As a result, its clients would be able to borrow from BlackRock while pledging their digital assets as collateral. Asset manager BlackRock has a strong client base spread across public pension schemes, endowments and sovereign wealth funds.

Another person said that BlackRock shall allow all of these big clients to trade through its integrated investment management platform Aladdin (short for “Asset, Liability, Debt and Derivative Investment Network”).

One of the three sources said that BlackRock was “looking to get hands-on with outright crypto” and was “looking at providers in the space”. The third sources also added that a working group of around 20 people inside BlackRock has been focusing on crypto. “They see all the flow that everyone else is getting and want to start making some money from this,” he added.

However, it still remains unclear when shall BlackRock unveil these services. The asset management giant hasn’t made any kind of official comment in this regard. However, the recent actions initiated by BlackRock over the last year clearly shows its interest in blockchain and crypto.

Last year in February 2021, BlackRock CEO Rick Reader said that the company has started to ‘dabble’ into Bitcoin. The CEO also believes that an uptick in inflation will push investors closer to hedge assets like Bitcoin.

Furthermore, BlackRock also secured SEC’s permission to trade Bitcoin futures in the open market and also added it as a potential investment for two of its funds.

Furthermore, BlackRock holds a significant stake in two of the world’s largest Bitcoin mining firms. As per reports, BlackRock has made a total of $384 million in investments in bitcoin mining companies - Riot blockchain and Marathon Digital.

Even though BlackRock doesn’t hold Bitcoin directly on its balance sheet, it has a sizeable investment in the company that does so. The asset manager holds a near 15% stake in MicroStrategy, the world’s largest corporate Bitcoin holder holding more than 125,000 BTC.