Bitcoin Price Soars as Blackrock Explores Cryptocurrencies and Blockchain
As reported originally by London’s Financial News, Bitcoin’s price continued to increase as the world’s largest shadow bank, Blackrock, has begun the exploration of cryptocurrencies and blockchain to serve its customers’ demands.
Bitcoin soared around 5% higher after the news was released while altcoins (all the coins other than bitcoin) such as Ethereum and Ripple rose by about 6% in a period of 24 hrs as well.
Blackrock Inc, the largest asset manager in the world, has set up a working group to explore blockchain and cryptocurrencies like bitcoin. The news comes as a surprise to most people after Blackrock CEO Larry Fink’s comment on Bitcoin:
“Bitcoin just shows you how much demand for money laundering there is in the world, it’s just an index of money laundering. That’s all it is”
Fink looks at technology only as a means to create efficiencies in businesses and to use the new data available to gain insights into investing. This explains the company’s interest in blockchain technology.
Although his views are not Bitcoin-friendly, Fink said in an interview with Reuters, “We are a big student of blockchain” but on the flip side he also mentioned that the group does not see a “huge demand for cryptocurrencies”
Institutional investors are still far away from the cryptocurrency space until now, but any move into the market by an asset manager such as Blackrock would open the floodgates for wider adoption.
Chris Yoo, a portfolio manager at Black Square Capital Management LLC, a cryptocurrency hedge fund, believes that the exploration of such technologies by Blackrock “comes as no surprise” and is a “positive development for the crypto market.” He further went on to say,
“As the largest asset manager in the world, its interest in crypto assets could be a catalyst for upward price movement and encourage other asset managers, even with more conservative strategies, to seriously explore investing in the crypto space.”
Blackrock’s move follows Steve Cohen’s investment into Autonomous Partners, a hedge fund focused on cryptocurrencies and equity investments in blockchain companies, through his venture arm Cohen Private Ventures. As reported by Fortune, the move by Steve Cohen makes him a part of the “Bitcoin Party.”
The entry of institutional investors has been triggered since November 2017, when CBOE and CME launched Bitcoin Futures. The proposed Bitcoin ETFs and subsequent entry of big names into the field further give high hopes to the market. However, the ecosystem still needs more regulatory clarity to go mainstream and bring in “big money.”