BlackRock, one of the world’s largest asset management companies, has invested in four of the five largest Bitcoin miners by market capitalization, positioning itself in the Bitcoin mining industry.
BlackRock is a behemoth in the asset management space, managing over $8 trillion worth of assets.
BlackRock’s Bitcoin Miner Investment
BlackRock had earlier shocked the traditional finance industry by submitting an application for a spot in Bitcoin ETF. Now, data from CNN has revealed that the entity is the second-largest investor in four of the five largest Bitcoin miners by market capitalization. Data from CoinMarketCap has shown that the five largest Bitcoin miners currently hold a market capitalization of around $5.4 billion. However, what the data also revealed is that these companies also reported significant losses over the past 30 days. This means BlackRock could be buying the dip in some of the largest companies in the Bitcoin mining industry.
BlackRock is easily one of the most successful asset management firms in the business world. Now, the company is looking to enter the digital assets space with its investment in Bitcoin miners. With the company consolidating its position as the second largest shareholder as follows,
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Riot Platforms Inc. (NASDAQ: RIOT) - 10,749,369 shares (6.14%), valued at $199.08 million
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Marathon Digital Holdings Inc (NASDAQ: MARA) - 10,938,032 shares (6.44%), valued at $190 million
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Cipher Mining Inc (NASDAQ: CIFR) - 2,200,654 shares (0.88%), valued at $8.36 million
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Terawulf Inc (NASDAQ: WULF) - 4,831,312 shares (2.28%), valued at $14.10 million
BlackRock Buying The Dip?
The Bitcoin mining industry is currently going through a difficult moment, with the industry’s poor performance quite noticeable. As mining difficulty continues to increase, the reduction in expected profits has also called the profitability of the practice into question. The increased cost of mining activity has resulted in a majority of Bitcoin miners operating underwater for over a year.
However, large companies such as BlackRock that have access to significant funds have the unique opportunity of aiding these smaller miners, as the increase in its position in these companies indicates. The total value of Blackrock’s investment in these four firms is around $411 million. This is equivalent to a meager 0.35% of the total assets held by the firm in 2022. The report also noted that BlackRock’s increased shareholding makes BlackRock Funds Advisors an important member of the Bitcoin Mining Council. The Bitcoin Mining Council is a collective lobbying group for Bitcoin mining in the United States.
BlackRock’s ETF Application
BlackRock had announced in June that it had filed an application for a Bitcoin spot exchange-traded fund. In a filing by the Nasdaq stock exchange with the United States Securities and Exchange Commission (SEC), Coinbase Custody Trust Company would be the custodian of the fund’s Bitcoin holdings, while the Bank of New York Mellon would hold custody of the fund’s fiat currency. The asset manager had already announced the launch of a Europe-focused exchange-traded fund in September 2022.
BlackRock had to refile its Spot Bitcoin ETF after the Securities and Exchange Commission had stated that the filings were inadequate. In the updated filing, Nasdaq named Coinbase as the surveillance partner, addressing the SEC’s main objection with BlackRock’s filing.
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.
