Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
BlackRock has introduced its inaugural Bitcoin exchange-traded product (ETP) for retail investors in the United Kingdom, marking a significant step in providing mainstream access to digital assets in the British market. The iShares Bitcoin ETP commenced trading on the London Stock Exchange on Monday, with its securities physically backed by Bitcoin held in custody by Coinbase.
UK Retail Access and Institutional Confidence
Jane Sloan, BlackRock’s EMEA head of global product, highlighted the importance of this launch, noting that the UK crypto investor base is projected to reach nearly 4 million in the coming year. She emphasized that the iShares Bitcoin ETP offers a secure gateway to digital assets through traditional investment platforms.
The product is built on institutional-grade infrastructure, ensuring robust custody and regulatory oversight. Coinbase is responsible for transferring Bitcoin from trading wallets into segregated, offline cold storage by the end of each day, enhancing security protocols.
Following U.S. Success and Future Expansion
This UK launch follows the substantial success of BlackRock’s U.S. spot Bitcoin ETF, which became the firm’s most profitable fund within 21 months of its debut. The U.S. fund currently manages over $87.5 billion in assets.
While the U.S. fund was nearing the $100 billion milestone, a recent market crash temporarily impacted its trajectory. Fabian Dori, Chief Investment Officer at Sygnum, views the UK launch as a sign of Bitcoin’s growing institutional acceptance as an investable asset class by both regulators and global asset managers.
Dori anticipates that the UK expansion will pave the way for a broader range of crypto product offerings. He also expects the Financial Conduct Authority (FCA) to proceed cautiously, monitoring market conduct before considering additional crypto assets or broadening issuer participation.
Larry Fink’s Evolving Stance on Bitcoin
The ETP launch also aligns with BlackRock CEO Larry Fink’s evolving perspective on cryptocurrency. Fink, who once described Bitcoin as an “index of money laundering” in 2017, now views crypto as serving “the same purpose as gold” as an alternative asset.
Fink acknowledged that markets often necessitate a re-evaluation of assumptions, stating that there is a legitimate role for crypto in investment portfolios.
Market Conditions and Regulatory Landscape
Despite BlackRock’s expansion, market conditions remain volatile. Digital asset investment products experienced $513 million in outflows last week, partly due to a Binance liquidity cascade that triggered significant liquidations.
The Financial Stability Board recently warned about crypto firms exploiting loopholes in fragmented global regulations, raising concerns about potential threats to financial stability due to differing international approaches to digital asset oversight.
