BlackRock Inc., the world’s largest asset manager, is no longer buying Bitcoin ETF or any other any cryptocurrencies as its clients have no interest in it any longer.
Larry Fink, Chief Executive Officer, was quoted saying in an interview with Bloomberg Television on Monday, “I don’t believe any client has sought out crypto exposure.” He also added, “I’ve not heard from one client who says, ‘I need to be in this.’”
This clearly means that not even a single fraction of BlackRock ETF’s $6.3 trillion has been invested in Bitcoin, Ether or any other crypto coins. This also indicates that institutions are still doubtful of cryptocurrencies being an asset class. Fink also said that BlackRock is studying coins to check their performance and also to determine if they can become ”legitimized” alternatives to cash.
BlackRock does not have the infrastructure to buy or sell crypto, whether in actual coins or Bitcoin ETF features, unlike the Wall Street investment banks like Goldman Sachs Group Inc. and JP Morgan Chase and Co.. Fink was quoted saying, “T the moment, no.”, when asked if he feels the need to be prepared for the day when clients want exposure.
BlackRock ETF has formed a team, including Terry Simpson, multi-asset strategist, to investigate ways to make use of the advantages of cryptocurrencies and Blockchain, and also the computer code that underpins them, as reported by the Financial News yesterday. After his firm’s interest in crypto is downplayed, Fink said that he is “very excited” about the Blockchain technology. He could possibly use it to enhance BlackRock’s Aladdin system for proper risk management, portfolio management and efficient trading system.
Institutional investors have been very eager to use cryptocurrencies, not only because of the downfall in prices since December, but also because of theft, fraud, illiquidity, and also the lack of custody services. If Fink’s decision gives any guide, it might take a while for them to use it.