BlackRock, the world’s largest asset manager, has launched its first Bitcoin product in Europe, a move that industry experts say will help legitimise cryptocurrencies in mainstream finance.
“This is a landmark development for crypto, displaying confidence in Bitcoin for mainstream investments,” Meryem Habibi, chief revenue officer at London-based crypto payment gateway Bitpace, told TNW.
“Through this first in Europe, BlackRock is not only legitimising the asset class but also paving the way for increased institutional and retail participation,” she said.
BlackRock’s product is called an “iShares Bitcoin ETP” (exchange-traded products). ETPs let investors buy and sell Bitcoin without directly owning the cryptocurrency. They are traded on stock exchanges and track the price of Bitcoin.
This enables investments in Bitcoin’s price movements through a traditional brokerage account without needing a digital wallet or dealing with the complexities of buying Bitcoin directly.
“ETPs offer institutional investors a way of accessing crypto without exposing themselves to the risks inherent in investing natively,” Anthony Yeung, CCO of Coincover, told TNW.
This type of investment vehicle is gaining momentum globally. Investors have already poured a combined $50bn into BlackRock’s Bitcoin ETPs in the US.
“If BlackRock’s success in the US is anything to go by, this will generate significant inflows of institutional cash [in Europe] — positively impacting Bitcoin price and helping drive acceptance of crypto as an essential asset to hold in a balanced portfolio,” Yeung said.
Europe’s ETP landscape
While Europe was slower to adopt ETPs than the US, it is now catching up. That’s partly thanks to the EU’s Markets in Crypto Assets (MiCA) regulation, which entered force late last year.
The legislation provides a clear and structured framework for launching new products. In the US, oversight is more fragmented.
Last year, Europe had $12bn of ETP assets under management. While that still paled in comparison to the US ($57bn), it represents a tenfold increase from 2020 levels.
In terms of investment options, though, Europe hosts 135 ETPs — far more than the US (35).
The largest ETP issuers in Europe last year were the US-based CoinShares, Switzerland’s 21Shares, and London-headquartered ETC Group, according to Track Insight.
James Burnie, fintech expert at British law firm gunnercooke, told TNW that BlackRock’s entry into Europe’s maturing ETP market is an added boost for the sector. “It gets traditional finance comfortable with dealing in crypto assets,” he said.
“However, given that the crypto markets are now already considered a mainstay of finance, such moves are now becoming less impactful,” he added. “Soon the scrutiny will be more on any large traditional player not being in the industry.”
Habibi echoes Burnie’s sentiments about the sector’s maturity. She argues that BlackRock’s move speaks to a wider trend of “blurring traditional finance with digital assets.”
“Crypto is becoming more aligned with everyday finance,” she said.
