BlackRock Launches Spot Bitcoin Private Trust

BlackRock has launched a spot Bitcoin private trust to give its U.S.-based institutional clients direct exposure to the world’s most popular cryptocurrency.

The firm said that despite recent market turbulence, it’s still seeing “substantial interest” from some of its institutional clients in accessing crypto markets through its technology. The news comes on the heels of another announcement last week that BlackRock would give users on its Aladdin asset management platform access to Coinbase Prime. 

The $10 trillion asset manager said it’s also exploring “permissioned blockchains, stablecoins, cryptoassets, and tokenization.”

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In the Bitcoin trust press release, the firm said it’s been encouraged by a plan for “decarbonizing crypto” created by nonprofits Energy Web, based in Switzerland, and RMI, based in the U.S. 

It’s an important consideration for institutional investors, who have previously cited the environmental impact of Bitcoin mining as a barrier to adding it to their portfolios.

Bitcoin and the environment

In November, 74% of institutional investors surveyed by Ernst & Young said they were likely to divest from companies with poor environmental, social, and governance performance.

The U.S. Securities and Exchange Commission (SEC) has also taken note.

In May, SEC Chair Gary Gensler voiced his support for creating disclosure requirements for “funds and advisers that market themselves as having an ESG focus.”

Last May, when Tesla announced that it would stop accepting Bitcoin as payment, CEO Elon Musk said on Twitter it was because of the “rapidly increasing use of fossil fuels for Bitcoin mining and transactions.”

For the two months that the company did accept Bitcoin, it faced backlash over what some saw as a mismatch between its electric vehicles and the carbon-based energy used to mine Bitcoin.

But Tesla hasn’t totally abandoned Bitcoin, which on Thursday was trading at $24,600 and had a market capitalization of $471 billion, according to CoinMarketCap.

In April, crypto miner Blockstream announced it had teamed up with Tesla and Block, Inc. on an all-solar Bitcoin mining facility in Texas. It uses Tesla batteries and solar arrays.