World’s Largest Asset Manager BlackRock Begins Exploring Bitcoin

BlackRock, the global investment management corporation based in New York City, has set up a working group to look into ways it can take advantage of cryptocurrencies and blockchain industry, its CEO said on July 16, 2018.

The Ever-Rising Interest in Crypto and Blockchain

Cryptocurrencies and blockchain are terms that are increasingly creeping into all spheres of everyday life.

With the world-renowned CFA Institute introducing these topics in their 2019 certification exams and cryptocurrencies now being mined for charity, the big name investors are taking an interest too.

For instance, last week, American billionaire Steven Cohen invested into a hedge fund focusing on cryptocurrencies and blockchain-based companies.

Across the pond, in Europe, SIX, the owner of Switzerland’s securities exchange in Zurich announced it’s establishing a platform offering a “fully integrated, end-to-end trading, settlement and custody service.”

And now the world’s largest asset management firm BlackRock is looking into the industry, as well.

The corporation has reportedly established a team of professionals from various sections of the business to analyze digital currencies and blockchain. One of these professionals is Terry Simpson, a multi-asset investment strategist.

The working group will investigate whether there is any reason why BlackRock should invest in bitcoin futures. They will also examine the crypto activities of BlackRock’s competitors and their effects on the business. The team will afterward present its results to senior management.

“As I have said in the past, we’re very excited about blockchain technology,” Larry Fink, BlackRock chairman and CEO, told Bloomberg TV.

“We are a big student of blockchain,” he told Reuters, confirming the story.

However, while the company is analyzing cryptocurrencies to see how they’re performing, no clients have sought to buy one so far, he said earlier.

“When it becomes more legitimized, when it has a true open nature of it that you can identify who the players are on both sides, that’s when we’ll probably look at it,” he explained.

BlackRock CEO’s Previous Skepticism Toward Bitcoin

The news might come as a surprise to anyone who heard Fink’s speech at an Institute of International Finance meeting in October 2017, when he labeled bitcoin as an “index of money laundering.”

“Bitcoin just shows you how much demand for money laundering there is in the world. That’s all it is,” he said at the meeting.

His comments came soon after JPMorgan Chase CEO Jamie Dimon said that people who own the cryptocurrency were “stupid,” and that he’s “not going to talk about bitcoin anymore.” Dimon also called bitcoin a “fraud”, saying “it’s worse than tulip bulbs. It won’t end well.”

Established in 1988, originally as a risk management and fixed income institutional asset manager, BlackRock is today the world’s largest asset manager, managing $6.3 trillion in assets.

BlackRock has 70 offices in 30 countries, as well as clients in 100 countries. Thanks to its power and a wide range of its financial activities, BlackRock also has the reputation as the world’s largest shadow bank (offering services similar to traditional commercial banks but outside normal banking regulations).

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