World’s biggest asset manager BlackRock launches crypto-focused blockchain ETF

    02 May 2022

    Blackrock, the world’s largest asset manager, has launched a blockchain exchange-traded fund (ETF). The fund, trading on the NYSE Arca, gives investors exposure to “companies that are involved in the development, innovation, and utilization of blockchain and crypto technologies.” The launch comes after Fidelity listed its crypto and metaverse ETFs last week.

    According to a press release, the world’s largest asset manager, which manages roughly $10 trillion in assets, added the iShares Blockchain and Tech ETF (IBLC) to its megatrends product suite on April 27.

    BlackRock’s thematic platform alone comprises 43 products with more than $50 billion in assets under management.

    “The expansion of our megatrends line-up today reflects the power of the millennial and rise of the self-directed investor, whose buying habits have reshaped mainstream consumer behaviors, and in turn, the companies in which they invest,” Rachel Aguirre, BlackRock’s head of US iShares product, said in a statement.

    IBLC, which the firm filed in January, seeks exposure to global companies at the forefront of the “development, innovation and utilization” of blockchain and crypto technologies, according to the company. It does not invest in cryptocurrencies directly.

    The new blockchain fund launched about a week after Fidelity listed its Crypto Industry and Digital Payments ETF (FDIG) and its Metaverse ETF (FMET). Both funds carry an expense ratio of 39 basis points.

    The BlackRock product, which costs 47 basis points, currently has 34 holdings. Its largest allocations are to crypto exchange Coinbase, as well as bitcoin miners Marathon Digital and Riot Blockchain, which each account for more than 10% of the portfolio. Other top holdings include Galaxy Digital, IBM, Hive Blockchain Technologies, Bitfarms, and PayPal.

    In tandem with the ETF launch, BlackRock published a paper highlighting three areas experiencing significant permanent changes: new consumer, industrial renaissance, and medical breakthroughs.

    “While most of the market attention has focused on the price and volatility of cryptocurrencies themselves, we believe the broader opportunity — leveraging blockchain technology for payments, contracts and consumption broadly — has not yet been priced in,” the paper states.

    Cryptoassets offer financial inclusion to the unbanked and allow users to regain control over the $150 billion annual market for their personal data, according to the paper. BlackRock’s research also highlights central bank digital currencies (CBDCs), noting that 87 countries are currently exploring them.

    Earlier this month, Blackrock and a few other companies, including Fidelity, participated in a $400 million funding round for crypto firm Circle Internet Financial, the issuer of the stablecoin USDC.

    “In addition to its corporate strategic investment and role as a primary asset manager of USDC cash reserves, Blackrock has entered into a broader strategic partnership with Circle, which includes exploring capital market applications for USDC,” the crypto firm noted.

    The fund launch comes as the traditional finance world becomes increasingly intertwined with crypto. Earlier this week, Fidelity announced that it would let customers allocate Bitcoin to their 401(k) retirement funds.

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