A SEC filing at the end of June reveals that Blackrock has invested in two bitcoin mining companies, Marathon Digital Holdings, and Riot Blockchain. Since the start of the year, Blackrock has also filed with the SEC for cash-settled bitcoin futures as eligible investments for its funds.
With China banning bitcoin mining throughout the country, seeking to quash all competition before rolling out its central bank digital currency (CBDC), bitcoin mining is about to take off in countries that are moving into the vacuum left by the Chinese pull-out.
Both Marathon and Riot will hope to take advantage of this opportunity. The Marathon stock price has shot up 754% in the last 12 months, and Riot is up 848%, both compared with BTC, which put on a 288% increase over the same period.
The Blackrock move appears to be part of a larger move by more traditional financial institutions looking to gain exposure to cryptocurrencies by means of equity purchases.
Blackrock itself is a $9 trillion colossus. So, making these two stakes in bitcoin mining companies is extremely significant. The stakes amount to 6.71% in Marathon and 6.61% in Riot. In value terms, the two stakes add up to a combined $382,962,003.08.
Fidelity Group is another huge entity to have invested in bitcoin miners with correspondingly large stakes. However, Valley Forge, Vanguard Group is the biggest shareholder in both Marathon and Riot, with Blackrock in second position.
Within the crypto sector as a whole, many other large institutions are dipping their toes. JP Morgan, the largest US bank, now offers crypto exposure to its “wealthiest” clients through six different crypto related funds. Bloomberg and Galaxy Digital also launched a DeFi index fund just yesterday.
These types of funds allow investors the perhaps less risky investment option, as compared with investing in the crypto projects themselves, and all the volatility that this may bring. Once long-overdue regulation is in place, and a bitcoin ETF is finally approved, we could see this investment become a flood.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.