Cryptocurrencies have been making headline news recently as their prices continue to surge. As interest in digital currencies grows, institutional investors are beginning to take notice and explore opportunities to provide services related to cryptocurrencies for their clients.
Blackrock Inc (NYSE:BLK), the world’s largest asset manager with over $10 trillion in assets under management (AUM), has confirmed that it is considering offering digital asset services to its clients. This move signals a major shift in attitude towards digital currencies by institutional investors and could fuel additional demand for the asset class.
In a letter to shareholders published on Thursday, BlackRock CEO Larry Fink says clients have shown interest in cryptocurrencies and “the underlying technologies,” prompting the firm to be looking at the possibility of offering them digital asset services and investments.
“As we see increasing interest from our clients, BlackRock is studying digital currencies, stablecoins and the underlying technologies to understand how they can help us serve our clients,” Fink wrote, without specifying any crypto in particular the company is studying.
Fink’s comments seem to confirm a CoinDesk February report in which the publication implied that the New York-based firm is planning to enter the cryptocurrency space.
In his letter, the BlackRock chief also talked about how digital currencies and digital currency payment systems are becoming more popular as more companies and governments explore the market.
“A global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption,” Fink wrote.
The American billionaire also touched on Russia’s invasion of Ukraine, suggesting it could accelerate the use of digital currencies.
“The war will prompt countries to re-evaluate their currency dependencies,” Fink said. “Even before the war, several governments were looking to play a more active role in digital currencies and define the regulatory frameworks under which they operate.”
The BlackRock CEO’s comments about considering crypto services for clients amid rising demand are in sharp contrast with his previous views about cryptos and Bitcoin (BTC) in particular.
In fact, in October he told CNBC that he was somewhat in line with JP Morgan CEO Jamie Dimon’s view that the apex cryptocurrency is worthless. Fink however, wasn’t all negative on crypto saying that even though he’s “not a student of bitcoin and where it’s going to go” he sees “huge opportunities in a digitized crypto-blockchain-related currency.”
"I'm probably more on the Jamie Dimon camp," says Larry Fink on #crypto. "I'm not a student of #bitcoin and where it's going to go so I can't tell you whether it's going to $80K or 0. But I do believe there is a huge role for a digitized currency." pic.twitter.com/xNn4NBNefr
— Squawk Box (@SquawkCNBC) October 13, 2021
Meanwhile, BTC traded 2.97% higher at $44,260 at press time. Year-over-year, bitcoin prices have declined 13.80%, and have rallied 16% so far in March. The world’s largest cryptocurrency by market cap – $848 billion as of writing – has been on a downward trend since its $69K peak in mid-November. While there have been a few sharp dips, Bitcoin’s rise has been nothing short of phenomenal. In 2011, the coin once traded at less than a dollar.