Crypto market has registered a major rout , the flagship currency, Bitcoin falling by more than 20 percent from its peak of about $67,387 in last week. Like other major cryptocurrencies, including Ethereum, the market value of most cryptocurrencies has also plummeted. This is particularly contributing to what some have termed as an intense bear market due to heavy losses recorded by both small-scale and large investors in the Cryptocurrency market.
However, one institution that is not panicking at all is BlackRock, which is a global asset manager that oversees $10.5tn in assets. This is in contrast to what may be expected due to the current bear run in the market as posted by analyst firm, Arkham Intelligence in a recent tweet revealing that BlackRock has not sold any of its Bitcoin.
As far as 2022 January was concerned, BlackRock only officially entered into crypto by allowing two of its funds to invest in Bitcoin futures. This action was regarded as a significant step in institutional investment in digital assets. Some of the BlackRock’s funds in the Bitcoin futures markets were BlackRock Strategic Income Opportunities and BlackRock Global Allocation funds.
The Arkham Intelligence’ tweet uses data from the required SEC filings for both BlackRock funds to demonstrate that the asset management titan is sticking to crypto positions. BlackRock’s Strategic Income Opportunities fund invests 1.71% in Bitcoin futures, and BlackRock Global Allocation fund invests 2.14% of its net assets in BTC, This Bitcoin News is positive for the market .
These allocation percentages have not changed for the past one year meaning that investors have not adjusted their allocation percentages due to the recent drop in the value of crypto-assets. This means that unlike most crypto investment which are often perceived as speculative bubbles, BlackRock sees theirs as long term investment. This asset manager looks like he believes that the current state of the crypto market, where we are now experiencing a bear market, is only for the short term and that digital asset prices will have to bounce back to the losses they are incurring.
Similarly, other renowned financial institutions such as Fidelity Investments, MicroStrategy and Grayscale have remained committed to their crypto strategies and products regardless of unfavorable environmental occurrences. Their commitment reflects BlackRock’s aggressively optimistic outlook for digital assets which is viewed by the firm as an unfolding new form of an uncorrelated asset class for investors to diversify their portfolios.
BlackRock’s decision not to sell its holdings is also different from the situation with several crypto-centered hedge funds and lending platforms that engaged in massive selling. These include Celsius Network, Voyager Digital and Three Arrows Capitals, which all went bust when there was a freeze in fund availability.
BlackRock manages trillions of dollars on behalf of clients and is often referred to as the world’s largest asset manager, and as such has considerable sway over Wall Street. The fact that it is still invested in crypto can also help other institutions which are still on the fence to begin investing in Bitcoin and other cryptocurrencies. That being said, if crypto bear market continues for a long time, it will be interesting to see whether BlackRock’s patience also runs thin.
For now, the asset management behemoth appears to be content to let its cryptocurrency wagers ride through the rough. BlackRock has for the second time endorsed its long-term investment strategy by asserting it will continue to invest in Bitcoin and hold it for the long-term, irrespective of the high volatility. This reassures BlackRock more about digital assets being poised for exponential growth as more and more people embrace the product. Still skeptical Wall Street investors that are not yet fully convinced of crypto may use BlackRock experience as a reference.
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Disclaimer!! The information provided by CryptopianNews is for educational and informational purposes only. It should not be considered financial or investment advice. Cryptocurrency markets are highly volatile and speculative, and investing in them carries inherent risks. Readers are advised to conduct their own research and consult with a qualified financial advisor before making any investment decisions.
Riz-A is a seasoned blockchain content writer with a passion for demystifying complex concepts and making cutting-edge technology accessible to a broader audience. With years of experience in the blockchain and cryptocurrency space, Riz-A has a proven track record of creating engaging, informative, and thought-provoking content.