BTC Approaches $25,000 Mark as BlackRock Launches First Bitcoin Investment Product

BTC Approaches $25,000 Mark as BlackRock Launches First Bitcoin Investment Product

Shortly after announcing a partnership with Coinbase to start offering cryptocurrency trading, the reputable asset management firm BlackRock has taken another step into the <crypto space.

The giant administrator has launched a new private trust that offers its institutional clients direct exposure to Bitcoin. The investment vehicle is available to US institutional clients and seeks to track the performance of the leading cryptocurrency and reduce the fund's expenses and liabilities, BlackRock said on its website.

The launch is the latest sign of the increasingly pervasive presence of digital assets in traditional finance. This will be its first investment product offering direct exposure to Bitcoin.

The move by the firm, which manages around $9 trillion in client funds, comes amid a notable crash in digital currency prices. Bitcoin is down more than 60% from its all-time high last year, with the rest of the market seeing a similar price correction. BlackRock addressed this scenario, noting that despite the drop, it has seen an increase in client interest in the new asset class.

BlackRock Moves Towards Cryptocurrencies

The New York-based manager has been making various efforts to cater to this growing demand. Last week the company announced a partnership with exchange Coinbase that will offer institutional clients of its Aladdin platform a range of digital currency services through Coinbase Prime for the first time.

This move appears to be part of a larger effort. BlackRock said on their website that they are working on four areas of digital assets and their associated ecosystems. These include permissioned blockchains, stablecoins, cryptocurrencies, and tokenization.

In filings with US regulators last year, it was disclosed that the manager was gaining Bitcoin exposure for some of its funds through CME's Bitcoin futures offering. Earlier this year, BlackRock backed USDC issuer Circle in a $400 million funding round.

Today's announcement comes just a year after BlackRock CEO Larry Fink said the asset manager saw too little demand in cryptocurrencies. In the past, Fink has spoken positively about Bitcoin, and, in April of last year, he said that digital currencies could become a "great asset class."

Bitcoin Approaches $25,000

Bitcoin price immediately reacted positively to the news, skyrocketing to $24,918 after nearly a day of strong recovery on news of a slight drop in US CPI in July.

BlackRock, Bitcoin Price | Source:<a href="https://www.tradingview.com/chart/?symbol=BINANCE%3ABTCUSDT"> TradingView </a>
BlackRock, Bitcoin Price | Source: TradingView 

On August 11, Bitcoin (BTC) surged to an early afternoon high of $24,896. BTC broke through the first Key Resistance at $24,560 before reversing.

At the time of writing, Bitcoin is trading at around $23,974, down 1.53%. In the past 24 hours, Bitcoin hit a high of $24,822 and a low of $23,828.

Although inflation cooled, it remained well above the Fed's target, leaving the market on the verge of another significant rate hike in September, affecting demand for riskier assets. Today, the Fear & Greed Index jumped from 41/100 to 42/100, supported by BTC's rally to nearly $25,000.

Coinbase COIN stock itself has rebounded strongly in the past week thanks to the agreement with BlackRock, which manages $9 trillion in assets after a long period of bad news.

Coincidentally, today also marks the second anniversary of MicroStrategy's first Bitcoin purchase, triggering a wave of institutional investors flocking to the crypto space. Even so, after BTC's decline since the start of this year, the company's investment took a hit and led to MicroStrategy reporting a loss of nearly $1 billion in Q2/2022.

CEO Michael Saylor lost his CEO position also because of this. However, the company confirmed that it would firmly hold the huge Bitcoin warehouse shortly.

Another major organization that has sold Bitcoin in the past is Elon Musk's electric car maker Tesla with the sale of 75% of its BTC holdings, worth $936 million.

Disclaimer: The author's comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR (do your own research)

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