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BlackRock’s move into cryptocurrencies has been swift, but the brakes may have been applied after Bitcoin and Ether. The launch of a Bitcoin exchange-traded fund in January was a major advance for cryptocurrencies and may have changed the market forever. That’s largely thanks to the company’s unlikely approval of the asset class. BlackRock first filed for iShares Bitcoin Trust (IBIT) about seven months before its launch. The company has since filed for an ETF that tracks the price of Spot Ether, the second-largest cryptocurrency by market capitalization. The move heightened the enthusiasm of crypto fans, who were overjoyed to see the world’s largest asset manager celebrate a new coin afterwards. But Robert Mitchnick, head of digital assets at BlackRock, shut down that possibility at last week’s Bitcoin Investor’s Day conference. “Bitcoin is by far the No. 1 focus in our customer base, and we’re focused on it,” Mitchnick said, followed by “a little bit of Ethereum and very little else.” He pointed out that Bitcoin and Ether account for the majority of the crypto market capitalization, with Bitcoin accounting for 52% and Ether accounting for 16%, according to CoinMarketCap. “In terms of track record, liquidity, product-market fit, investors, clarity of story, all of these things, there’s a huge gap there,” he added. “So I think there’s a misplaced assumption that there’s going to be a long tail of other companies from us there. That’s not really our focus.” Mitchnick also said at the same event. said that Bitcoin would be a good diversifier for a portfolio despite the recent stock rally, and while the crypto cycle will continue, Wall Street’s adoption of Bitcoin will reduce future returns. He said it is likely. In addition to Bitcoin and Ether ETFs, BlackRock is also exploring digital assets through tokenization efforts. Last week, the company launched the Ethereum-based BlackRock USD Institutional Digital Liquidity Fund, giving investors the opportunity to earn USD yield. This is the company’s first tokenized fund issued on a public blockchain. “With IBIT, it’s ironic that we’ve taken crypto-native investment exposure and put it in a traditional financial wrapper,” Mitchnick said at Bitcoin Investor Day. “And with tokenization, we are taking traditional financial investment exposure and putting it in a crypto-native wrapper.” Next Generation Finance Much of the irony is that Bitcoin has anarchist roots. It stems from the fact that its early proponents advocated a type of digital currency that operated outside of the traditional financial system, which is exactly why Wall Street hated Bitcoin. The idea of tokenizing “real-world assets” like gold is currently gaining popularity among financial institutions that are wary of crypto assets but enthusiastic about the underlying blockchain technology. BlackRock CEO Larry Fink told CNBC’s “Squawk Box” earlier this year that ETFs are “the first step in a technological revolution in financial markets” and that “the second step is to create tokens for any financial asset.” It will become a reality,” he said. Mitchnick said that while running both a Bitcoin ETF and an Ether ETF may seem contradictory to running a tokenized fund on Ethereum, this is not the case. “Some of our customer base are new to digital asset rails, but they want investment exposure and want to deliver it in a convenient and familiar wrapper,” he said. . “And we have clients who are comfortable and fluent with blockchain infrastructure to work with digital assets. They want traditional investment exposure in this digitally native, global and programmable format. I want it.” [and] “This dichotomy will continue for some time. But eventually we expect to see some degree of convergence, where the best parts of old systems and the best parts of this new technology are fused into next-generation infrastructure. “We are doing so,” he added. Set in Finance. ”
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