BlackRock, the world's largest asset management company, may launch cryptocurrency services

After Wall Street financial institutions such as Fidelity and Goldman Sachs provide their clients with exposure to cryptocurrency services, another asset management giant is stepping up its deployment in the cryptocurrency industry.

BlackRock, the world’s largest asset manager, is preparing to offer cryptocurrency trading services to its investor clients, three people familiar with the matter said.

One of the sources revealed that BlackRock plans to enter the cryptocurrency space with a “crypto lending service,” a fundamental service in crypto finance that allows investors to borrow money using cryptocurrencies as collateral.

At the same time, another source revealed that BlackRock will also provide cryptocurrency trading services through its integrated investment management company Aladdin (Aladdin), but the launch time is unclear.

BlackRock is currently the world's largest asset management company, headquartered in New York, with more than $10 trillion in assets under management. Its clients include various public pension funds, endowments and sovereign wealth funds.

This isn't BlackRock's first move on cryptocurrencies, as it has recently announced that it will launch a cryptocurrency-themed ETF. On January 22, Salim Ramji, head of BlackRock’s global ETF business, revealed in an interview on the Bloomberg blog that BlackRock is preparing a blockchain-themed ETF.

According to regulatory disclosures, the ETF submitted by BlackRock, called the "iShares Blockchain and Tech ETF," will track the investment results of the NYSE FactSet Global Blockchain Technology Index. The index consists of companies involved in the development and deployment of blockchain technology in the United States and abroad. According to the filing, the proposed fund plans to invest at least 80% of its assets in stocks in the index. But the fund will not invest in cryptocurrencies directly or indirectly through cryptocurrency derivatives. In addition, the disclosures do not indicate the share or expense ratios planned to be issued.

The number of ETFs tracking crypto-related stocks has grown to 15 in recent years, according to Bloomberg data. Currently, numerous U.S. financial institutions are applying for cryptocurrency-themed ETFs.

At present, the total market value of cryptocurrencies is about 2 trillion US dollars. After breaking through the trillion-dollar market value, more and more global financial institutions have begun to pay attention to this new financial asset, and some listed companies and financial institutions have begun to try to incorporate cryptocurrencies into their balance sheet.

In fact, as early as 2019, BlackRock has begun to get involved in the field of encryption. At the time it hired Robert Mitchnick, a former Ripple product marketer who is now head of distributed ledger technology and digital assets at BlackRock. BlackRock was also expanding its crypto team last June. According to a third-party The source said BlackRock has a working group of "around 20 people" that is looking at cryptocurrencies.

BlackRock has also previously had indirect exposure to cryptocurrencies by holding shares in public companies, such as BlackRock's 16.3% stake in MicroStrategy, which has been buying large sums of bitcoin in recent years. As of now, the company owns over 125,000 bitcoins.

In addition, BlackRock holds large stakes in two bitcoin miners, holding 6.71% in Marathon Digital Holdings and 6.61% in Riot Blockchain.