The world’s largest asset management company, BlackRock, plans to provide cryptocurrency trading to its investors.
According to one of the people, the New York-based firm, which manages over $10 trillion in assets for institutions, aims to join the cryptocurrency market with “client assistance trading and subsequently with their own credit facility.” Clients would be able to borrow money from BlackRock by offering crypto assets as security.
The information comes from three persons who are familiar with the plans. Clients, including some of the world’s most significant investment funds, will be able to trade cryptocurrencies using ALADIN, the company’s integrated investment management platform.
This isn’t the first time BlackRock has been linked to cryptocurrency-related schemes. Last year, Rick Rieder, BlackRock’s global fixed income chief investment officer, told CNBC that asset management had begun to get exposure to the Bitcoin area and had allocated funds to it. “I wouldn’t put a number on the percentage allocation one should have; it depends on what the rest of your portfolio looks like,” said BlackRock’s chief investment officer of global fixed income.
“Today the volatility of it is extraordinary, but listen, people are looking for storehouses of value.” “People are looking for places that could appreciate under the assumption that inflation moves higher and that debts are building, so we’ve started to dabble a bit into it.”
Rieder said on “Squawk Box
MicroStrategy’s CEO, Michael Saylor, routinely touts news about his firm’s bitcoin holdings, and BlackRock owns 16.3 percent of MicroStrategy.
Blackrock paves the way for more adoption
The cryptocurrency sector is seeing unprecedented widespread adoption. Many institutions that have previously ignored the market are now releasing crypto investing plans.
Countries with regulatory worries about the crypto business likewise attempt to become more welcoming to the asset class. Russia is an excellent example of this. Russia’s government has been split on its crypto stance for some time but has recently chosen to give regulatory clarity for the business rather than outright prohibit it.
Recently India released clarity on the budget speech regarding taxation on cryptocurrencies. Even though the country is charging a hefty tax amount of 30%, many believe it’s an initial step towards a much-awaited crypto mainstream adoption.