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BlackRock Gets Exposure to Bitcoin Through MicroStrategy, Both Firms U-Turn on Shaming Crypto

Investment giant BlackRock, the biggest stakeholder of MicroStrategy — has now indirect exposure to Bitcoin as the world’s largest intelligence company has recently purchased 21,454 Bitcoins.

Although Bitcoin’s price did not seem affected by the recent news of MicroStrategy’s new capital allocation of investing $250 million in Bitcoin (BTC), the majority of crypto analysts and Bitcoin bulls have beliefs that Bitcoin is currently in its early stages of a coming bull market.

MicroStrategy CEO Michael J. Saylor believes that Bitcoin is digital gold, and it is “harder, stronger, faster, and smarter than any money that has preceded it.” However, 7 years ago, he made a drastically different comment on Bitcoin. He tweeted:

“#Bitcoin days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling.”

Today, Saylor finds Bitcoin to be persuasive and the cryptocurrency shows “evidence of its superiority as an asset class for those seeking a long-term store of value.”

MicroStrategy’s bet on Bitcoin has acted as a sign of massive institutional adoption in cryptocurrencies yet to come. In addition to the billion-dollar company’s purchase in Bitcoin; according to data from CNN Business, BlackRock Fund Advisors currently has a 15.24% stake in MicroStrategy, followed by the Vanguard Group, which holds an 11.72% stake.

Just over a year ago, Blackrock’s asset managers said cryptocurrencies are not for everyone, and they’re only suitable for those who can “stomach potential complete losses.” Richard Turnill, BlackRock’s global chief investment strategist said:

“We see cryptocurrencies potentially becoming more widely used in the future as the markets mature. Yet for now, we believe they should only be considered by those who can stomach potentially complete losses.”

Turnill stated that the extreme price volatility seen among cryptocurrencies was the reason for his warning and that the extreme price volatility observed in the US stock markets during financial crises looked “placid” compared to crypto’s volatility.

The institutional barrier to adopting crypto

Blockchain.News previously spoke to Christine Sandler, the Head of Sales and Marketing at Fidelity Digital Assets, who believes that the crypto industry needed to appeal to more traditional institutions and to begin the mitigate the frictions that were present.

During late 2019 to early 2020, Fidelity Digital Assets surveyed 774 institutional investors across the United States and Europe and found that 80 percent of the participants found something of value in digital assets. 60 percent of the participants said that they would incorporate digital assets into their investment portfolios. 90 percent of the survey respondents were traditional institutional investors.

The infrastructure remains nascent in digital assets, where market centers, including exchanges and liquidity providers, are not very centralized. The lack of construct and market data may lead to concern regarding market manipulation.

BlackRock, Vanguard, and Norway Now Indirectly Own $110 Million of Bitcoin, Ahead of Stock Sell-Off

Billion-dollar intelligence firm MicroStrategy recently publicly disclosed that it now owns 38,250 Bitcoins. This huge acquisition of the world’s largest cryptocurrency enabled the Norwegian Government Pension Fund, the Vanguard Group, and BlackRock Fund Advisors to indirectly own more than 10,000 Bitcoin (BTC) altogether.

MicroStrategy’s CEO previously stated in the announcement of its original purchase of the world’s largest cryptocurrency that Bitcoin is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.

The firm initially purchased 21,454 Bitcoins, for $250 million, followed by an additional $174 million in Bitcoin, totaling 38,250 Bitcoins at an aggregate purchase price of $425 million. The move by MicroStrategy to diversify the company’s excess cash liquidity into Bitcoin as a hedge fund was undeterred by the recent price dip in the premier digital asset.

Bitcoin’s price has recently dipped due to the recent stock market sell-off. Bitcoin is trading at $10,472 at press time, and MicroStrategy’s entire purchase of Bitcoin averaged $11,111 per BTC.

Arcane Research’s report recently revealed that the Norwegian Government Pension Fund, Vanguard Group, and BlackRock Fund Advisors currently indirectly own 10,000 Bitcoins. According to the report, BlackRock currently owns 15.24 percent of MicroStrategy’s shares, Vanguard 11.72%, and the Norwegian Government Pension Fund 1.51 percent.

BlackRock owns 15.24 percent of MicroStrategy, which gives the firm an indirect exposure to 5829.3 BTC, Vanguard 4482.90 BTC, and Norway, 577.58 BTC. This results in an aggregate total of over $110 million.

The stock market sell-off continues to worsen

The stock market faced a sharp sell-off on Monday, led by correcting the hopes and expectations that the economy would be recovering. While the US continues to struggle with the coronavirus pandemic, Europe has also started to see a sharp increase in COVID-19 cases, indicating a second wave.

The S&P 500 has been down more than 7 percent from early September. Analysts are now watching the 200-day moving average to see if there could be an indicating of an upcoming declining market. Technical strategist Scott Redler said that the S&P 500 is forming a head and shoulders chart pattern, indicating a negative sign for stocks. He added that there could be a bigger sell-off in store.

Although Bitcoin’s price has moved in tandem with the stock market, the BTC price is still holding well above $10,000, its support level amid the stock market plunge. It seems that MicroStrategy and its shareholders may well benefit from its large acquisition of Bitcoin, as the stock market and the COVID-19 pandemic is far away from recovery.

BlackRock CEO Larry Fink Says Bitcoin Can Evolve Into Global Asset and Impact Dollar

Larry Fink, the head of the world’s largest asset manager BlackRock sees the potential for Bitcoin and cryptocurrency sector to evolve into a mainstream marketplace. He also noted the impact BTC is having on dollar-based assets internationally.

BlackRock CEO Larry Fink has given a relatively understated endorsement of Bitcoin in a report by CNBC on Dec. 1.

Fink said:

“Bitcoin has caught the attention and the imagination of many people. Still untested, pretty small market relative to other markets.”

Although the Blackrock CEO recognizes that BTC is “seeing big giant moves every day,” Fink maintained it’s a “thin market,” but did not rule out Bitcoin’s potential growth.

While speaking at the Council on Foreign Relations on Dec 1, Fink said:

“Can it (BTC) evolve into a global market? Possibly.”

Fink also noted in the CNBC report that having a digital currency like Bitcoin has a real impact on the US dollar—making it less relevant to international holders of dollar-based assets.

The Blackrock CEO further raised the question that many economists have been pondering in regard to Bitcoin:

“Does it change the need for the dollar as a reserve currency?”

BlackRock holds over $7.4 trillion in assets under management making it the world’s largest asset manager. While Fink’s comments were not overly bullish, the comments are still a positive development for the still-nascent cryptocurrency market and its pioneer Bitcoin. The CEO’s comments also indicate that BlackRock is watching the crypto space very closely.

Notably, institutional adoption is currently driving bullish sentiment in the Bitcoin and crypto space along with major players who have publicly announced major allocations of their portfolios to Bitcoin—such as billionaire hedge fund managers Stanley Druckenmiller and Paul Tudor Jones II and MicroStrategy’s Michael Saylor.

BlackRock Filings Signal the Giant Asset Management Firm Could Start Bitcoin Futures Trading

BlackRock Inc., the US multinational investment management corporation, has become the latest major financial institution to enter into the crypto space. The firm has filed documents with the United States Securities and Exchange Commission (SEC) indicating its potential move to start trading Bitcoin futures.

Prospect documents filed with the Commission on Wednesday, January 20, show that BlackRock would be investing cash-settled Bitcoin futures on exchanges registered with the Commodity Futures Trading Commission (CFTC).

However, BlackRock did not mention which commodity exchange it would choose to conduct Bitcoin futures purchases. Currently, derivatives giant CME Group is the only exchange registered with the CFTC that offers cash-settled Bitcoin futures.

The documents show two specific funds (the BlackRock Strategic Income Opportunities Portfolio and the BlackRock Global Allocation fund) that may now participate in the trading of Bitcoin futures.

The documents indicate that the specified BlackRock’s funds may begin using derivative products, stating that these include currencies (including Bitcoin). However, the filings outlined risks associated with Bitcoin futures trading, such as illiquidity risks because of the “relatively new” market. Regulatory changes, valuation and volatility risks could affect the price and therefore adversely impact the performance of the funds.

BlackRock is the world’s largest asset manager with over $7.8 trillion assets under management. In 2018, reports showed that BlackRock created a working group to explore ways the company could take advantage of the rapidly growing crypto market.

Bitcoin Capturing the Professional Investing Class

Financial markets are attracted to move to the crypto space. Bitcoin has become a rich hunting ground. Better performance of Bitcoin is drawing institutions like asset managers and banks to dive deeper into the space. Bitcoin has a higher return on a one, three, and ten-year basis than any other asset class. When returns are extremely high, investors attempt to make their way to move in.

While large trading companies expand in cryptocurrency, trading patterns have shifted. Instead of profiting from pricing inefficiencies, big firms now look to supply prices to exchanges where most retail clients trade, and make money from the spread between offers and bids.

February 18, 2021: Crypto Price Analysis for BTC, ETH, and DOT

The whole cryptocurrency market has been on a massive bull run lately. Altcoins have benefitted from Bitcoin’s current momentum. Things are looking good for the cryptocurrency industry, thanks to the wave of institutional investors purchasing and backing Bitcoin.

Currently, BlackRock asset management has announced its intention to diversify investments by buying Bitcoin. With $7.4 trillion assets under management (AUM) at the moment, BlackRock is the world’s largest asset manager, according to lead crypto investor Dan Held. BlackRock’s chief investment officer Rick Rieder told CNBC:

“Today, the volatility of Bitcoin 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 Bitcoin.”

With the wave of institutional adoption pushing Bitcoin’s price higher, the cryptocurrency is currently in a state of price discovery. Here is a look at which altcoins have also considerably surged in the past week, in tandem with Bitcoin’s ascent to hit over $52K on the market.

BTC/USD

It can be seen from the candlestick chart of Bitcoin’s 4-hour price that the current Bitcoin price has broken through the psychological level of $50,000 and continues to stand firm on this basis. This shows that the bulls are strong, and they are in no hurry to lock in profits as they expect Bitcoin prices will continue to rise, with bears losing ground.

From the graph, you can see that the candlesticks of the recent 4 hours have been closed above the 9-day Moving average. The rise of the exponential moving average (EMA) ribbon indicates that the bulls are in control. Breaking the all-time high of $50,000 and standing firm at $51,000 are signs of a big bull market.

We can see that the price is currently in the upward channel and is testing the pressure line of the upward channel. If the bulls can push the price above the upward pressure line to about $54,000 in the next few days, then BTC/USD may quickly spike to 60,000 US dollars.

Currently, short positions may intervene, and retail traders may attempt to sell their position and lock in profits. If Bitcoin’s price falls below $50,000.00, then the first support level to look for is the 20-day moving average, which is pinpointed at approximately $44,391. If the short positions bring the price below $44,391.00, then a downward trend may begin for Bitcoin and extend to the 50-day moving average of $37,973. A break below $37,973.00 will indicate that a bear market will begin.

Source: TradingView

It can be seen from the Moving Average Convergence Divergence (MACD) chart that the blue line has begun to turn upstream, surpassing the yellow signal line with an increase of opening amplitude. This helps consolidate the formation of a short-term bull market.

ETH/USD

Source: ETH/USD via TradingView

Judging from the four-hour candlestick chart of Ethereum, Ether (ETH) is currently being converted within the uplink and has recently fluctuated between $1660 and $1918. At the moment, the price of Ethereum is in a state of price discovery, and buyers are trying to push the price above $1920.

If a surge above $1920 is successful, Ethereum’s price will undergo an upward trend with a target mark of $2,000, which is an important psychological barrier. If the bulls manage to push ETH’s price above the channel of $2,000, then the cryptocurrency’s momentum may accelerate.

The next pressure level will then be $2,500. To completely overcome this resistance level, the price will need to rise above about $1918, after which horizontal adjustments will be made near this level as the struggle between long and short positions determine Ethereum’s final direction.

If Ethereum’s price fumbles from its current level of around $1800.00, a break below the 20-day moving average of $1,687.5 will be the first indicator of weakness. If it breaks below $1,687.50, then $1,429.74 will be the next support point.

DOT/USD

Source: DOT/USD via TradingView

The price of Polkadot rose to a record high on February 17, which shows that the bulls are in control of the entire market, reaching an all-time high of $33.89 and closing at $31.99. As can be seen from the MACD diagram, the blue MACD line has already crossed the yellow signal line from bottom to top, forming a golden fork. The opening range is currently expanding without any signs of a decrease in transaction volume. This is proof of the future upward trend of DOT’s price.

However, although DOT’s bull run seems likely to continue, yesterday’s candlestick pattern indicates through the long upper shadow line in the graph that bears are trying to counter the price increase.

If the bulls can push the price above the upward pressure line of the ascending channel, the momentum may accelerate, and the DOT/USD currency pair may rebound quickly to around $40. If DOT/USD encounters strong resistance when it touches the pressure line of the upward channel and rebounds downward, investors do not need to worry too much as long as the price remains in the upper half of the channel. This proves that the price of Polkadot will still gradually rise, but at a slightly slower rate.

If the price falls below the midpoint of the channel, it will be the first sign of weakening momentum, and the price will touch the 9-day moving average and then test the support line of the downward channel downward, which is an essential support level, as a break below this level may indicate a change in trend.

Blackrock CEO Says Low Bitcoin Demand from their Clients

In an interview with CNBC Wednesday, Larry Fink, the BlackRock investment asset management company CEO, said he sees low demand for crypto tokens.

Fink, who in the past stated that digital assets could become a great asset class, admits that he is not seeing a huge demand for cryptocurrencies among long-term investors.

The administrator stated that demand for crypto assets are not part of the focus on retirement and long-term investors. He explained that Blackrock investors are more focused on building long-term returns over a long period of time, and they don’t have conversations about cryptos.

He said there is a low demand for cryptocurrencies among long-term investors like individual retirement accounts (IRA) plans, pension funds, and retirement funds, thus putting cryptocurrencies in a similar class as retail-driven meme stocks.

Although Fink is delighted about investors taking an interest in speculative assets, he said that cryptocurrencies are entirely unrelated to BlackRock’s mission.

He acknowledged that in the past, people had been asking him about Bitcoin and other cryptocurrencies, but no such demands recently he interacted with his clients. “In my last two weeks of business travel, not one question has been asked about that [crypto]. That is just not part of the focus on retirement and long-term investors. We see very little in terms of investor demand on those types of things, but quite frankly (many) may not come to BlackRock for that type of demand,” Fink said.

Blackrock is considered the world’s largest asset manager, holding trillion assets under management worth almost $10 trillion.

Crypto as Business Opportunity

Despite Fink’s scepticism on crypto assets, Blackrock has been positive and demonstrated commitment to crypto investments.

In August 2020, Blackrock indirectly exposed to Bitcoin (by purchasing 21,454 Bitcoins worth $250 million) through its ownership stake in MicroStrategy software company. Such investments made Blackrock the biggest shareholder of MicroStrategy (by holding a 15.24% stake in MicroStrategy during that time).

In April this year, SEC filings indicated that Blackrock made $360,000 on Bitcoin CME futures this year, meaning that the firm had allocated a minimal amount of its total $10 trillion managed assets to Bitcoin futures.

In February, Rick Reider, Blackrock’s chief investment officer of global fixed income, said that the company had begun to dabble in crypto assets. He said that although the volatility of cryptocurrencies is extraordinary, people are looking for a storehouse of value.

Bitcoin and other cryptocurrencies have become increasingly popular with institutional investors, big firms and retail investors alike.

In April, BNY Mellon bank announced that it would begin providing Bitcoin services this year. Various investment banks and asset managers, including Goldman Sachs, Morgan Stanley, Fidelity, and JP Morgan, are working to gain cryptocurrency exposure for their customers. PayPal, Mastercard, and Visa are also working to allow digital assets to be used as payment methods on their systems.

SEC’s Filing Shows Blackrock Made $369,137 Profits on Its Bitcoin Futures

A current filing with the US Securities and Exchange Commission (SEC) shows that BlackRock Inc has expanded a variety of its Bitcoin futures contracts since Q1 2021.

On Tuesday, September 28, a filing to the SEC indicates that BlackRock investment management firm has made $369,137 on Bitcoin futures since July.

According to the filing, Blackrock Global allocation fund held 54 Bitcoin CME futures contracts that expired on August 27, and the contracts made $369,137 for the New York-based investment company.

BlackRock Global Allocation fund bought 54 Bitcoin futures contracts issued through the CME (Chicago Mercantile Exchange) on July 31. The contracts expired on August 27 and were worth $10.8 million, appreciated by $369,137.

The gains from the Bitcoin futures represents about 0.00138% of the Blackrock Global allocation fund or 8.91 BTC at the time of writing.

BlackRock is the world’s largest asset manager, with over $9.5 trillion in total assets under management.

In January, Blackrock filed prospect documents with the SEC signalling its potential to invest in Bitcoin futures. The documents showed two specific funds (the BlackRock Strategic Income Opportunities Portfolio and the BlackRock Global Allocation fund) to participate in the trading of Bitcoin futures.

In April, BlackRock has made $360,000 on Bitcoin futures since January. The SEC filing showed BlackRock’s Global Allocation Fund held 37 Bitcoin CME futures contracts that expired at the end of March.

Demand Dips for Bitcoin Futures

This time, BlackRock’s profit from Bitcoin futures comes when demand for such products has declined, which is a setback for Bitcoin.

An investor note by JP Morgan investment bank last week showed that major investors are now looking for Ethereum futures instead of Bitcoin futures.

JP Morgan attributed that the happening to weak demand for bitcoin future’s by institutional investors.

JP Morgan stated in its investor note that the interest in Ethereum futures indicates much a higher demand than for Bitcoin futures by institutional investors – big firms such a hedge funds with a massive pile of cash to play.

The note reported that Bitcoin futures on the Chicago Mercantile Exchange (CME) traded below the price of Bitcoin this month.

When there is high demand for Bitcoin, futures tend to trade higher than the actual cryptocurrency. But it has not been the case in September, according to CME data.

Instead, investors have been eyeing up Ethereum futures since August, and the 21-day average Ethereum futures premium rose 1% more than the price of the cryptocurrency, JP Morgan stated.

But despite such interest in futures, both cryptocurrencies are struggling. Bitcoin is currently trading at $42,229.95, while Ethereum price standing at $2,910.23.

BlackRock CEO Believes Russia-Ukraine War in Boosting Crypto Adoption

BlackRock Chairman and Chief Executive Officer Larry Fink has lent his voice to describe the role of digital currencies in the ongoing war between Russia and Ukraine.

In a letter to Shareholders on Thursday, Larry criticized Russia’s invasion of Ukraine, noting that it has set back about 30 years of globalization efforts.

Of particular note is the acknowledgement of the role of digital currencies which he noted will help many countries record a paradigm shift in their view and approach to the nascent asset class. An excerpt of Larry’s letter reads:

“A less discussed aspect of the war is its potential impact on accelerating digital currencies. The war will prompt countries to re-evaluate their currency dependencies. 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,”

As correctly observed, digital currencies came to Ukraine’s aid when the country called for help with more than $30 million contributed by the broader community to support the country’s efforts in repelling Russian forces. From Bitcoin (BTC) to Dogecoin (DOGE), and Non-Fungible Tokens (NFT), the backing the crypto ecosystem gave to the Ukrainian people has not gone unnoticed.

Larry identified the move by many Central Banks to float a digital version of their currencies, a move that is poised to stem the dominance of cryptocurrencies in the emerging payment ecosystem. In Larry’s belief, crypto can help cut down the cost of transactions as well as in remittances. This obvious superior outlook has cemented BlackRock’s resolve to continually embrace digital currency innovations as it has done in time past.

“A global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption,” Larry said, concluding his talk on digital currencies, adding that “Digital currencies can also help bring down costs of cross-border payments, for example when expatriate workers send earnings back to their families.”

USDC Issuer Circle Secures $400M Funding from Fidelity and BlackRock

Circle, the company behind USD Coin (USDC), has bagged funding worth $400 million from different players, including Fidelity Management, BlackRock Inc, and Research LLC, signalling traditional finance interest in the crypto space.

As one of the largest tokens in terms of market capitalization, USDC has just surpassed Tether (USDT) by reaching a $40 billion market cap on the Ethereum network, according to online media Anue, citing data from CryptoRank data.

Currently, USDC’s presence in the crypto market continues to sit fifth among the top-ten cryptocurrencies, with a market capitalization over $50.68 billion, according to CoinMarketCap.

Circle’s partnership with BlackRock, a leading American multinational investment company, will enhance capital market applications for USDC.

BlackRock will also be the primary asset manager for USDC’s cash reserves.

The penetration of cryptocurrencies in traditional finance continues to gain steam. BlackRock’s CEO Larry Fink has shown receptiveness to this sector because he sees it as a stepping stone toward helping clients.

Rob Goldstein, the chief operating officer at BlackRock, acknowledged:

“We believe digital assets and blockchain technologies are going to become increasingly relevant for BlackRock and our clients.”

Circle’s CEO, Jeremy Allaire, noted that adding BlackRock as a strategic investor will boost USDC’s adoption. He pointed out:

“Dollar digital currencies like USDC are fueling a global economic transformation.”

Other investors in the project include Fin Capital and Marshall Wace LLP, with the funding round anticipated to end in the second quarter.

Circle continues to make notable strides in the corporate world. Earlier this year, the Chicago-based company launched a new account service that enabled corporate customers to deposit, withdraw, receive and store cryptocurrencies through their account and settle all payments in USDC.

Furthermore, the newly added feature would enable corporate accounts to integrate cryptocurrency trading into their corporate accounts’ operations and offers eligible investors a stablecoin lending program called Circle Yield, Inc., which offers annual returns of up to 4% to 6%.

BlackRock to Boost Crypto Access Points through Partnership with Coinbase

BlackRock, the globe’s largest asset manager, has teamed up with crypto exchange Coinbase to provide institutional investors with new crypto access points.

Through the strategic partnership, BlackRock’s Aladdin will be connected with Coinbase Prime to provide institutional investors with direct and seamless access to crypto, beginning with Bitcoin (BTC).

Joseph Chalom, the global head of strategic ecosystem partnerships at BlackRock, pointed out:

“Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets.”

With assets under management clocking $10 trillion by the end of last year, BlackRock has emerged as a significant global player to the extent that it has been dubbed the “fourth branch of government.”

Therefore, Aladdin, the end-to-end investment management platform of BlackRock, seeks to boost crypto adoption among institutional investors. Chalom added:

“This connectivity with Aladdin will allow clients to manage their bitcoin exposures directly in their existing portfolio management and trading workflows for a whole portfolio view of risk across asset classes.”

Coinbase prime is the institutional prime broker arm of crypto exchange Coinbase, and it integrates prime financing, advanced agency trading, staking infrastructure, and reporting needed for the entire transaction lifecycle. Supporting more than 13,000 institutional clients, Coinbase Prime will render crypto trading, prime brokerage, reporting capabilities, and custody through the deal.

As institutional crypto adoption continues to tick, the BlackRock-Coinbase partnership seeks to be a stepping stone toward developing new access points.

A recent study by the leading investment bank Goldman Sachs showed that 51% of its institutional clients had crypto exposure.

The findings revealed that institutional interest in cryptocurrencies was witnessing strong growth because crypto exposure rose from 40% in 2021 to 51% in 2022, Blockchain.News reported.