World’s Largest Asset Manager Debuts Blockchain ETF

BlackRock has introduced an exchange-traded fund (ETF) to give investors access to the rapidly growing blockchain market. Asset managers have predicted that the blockchain business will usher in irreversible transformation in a variety of fields.

The BlackRock Blockchain And Technology ETF is a mutual fund that invests in blockchain and technology.

As part of its megatrend lineup, BlackRock, a trillion-dollar asset management, unveiled a blockchain ETF on Wednesday. The iShares Blockchain and Tech ETF (IBLC) is not backed by crypto assets, but rather monitors the shares of prospective blockchain companies, according to BlackRock.

The firm registered for the investment vehicle in January and launched it on Wednesday, with $4.7 million in assets under management. Currently, the ETF is made up of approximately 34 different holdings. Coinbase, Marathon Digital Holdings, and Riot Blockchain Inc. are the top three holdings in the portfolio, with 11.45 percent, 11.19 percent, and 10.41 percent weighting in the fund, respectively.

In a paper titled "The Great Acceleration," released in conjunction with the ETF launch, BlackRock cited blockchain technology as a key driver of permanent changes in consumer behavior. However, according to the firm, the market has yet to figure in the potential of this underlying technology to be used in a variety of different fields other than cryptocurrency development. The following was taken from the paper:

“While most of the market attention has focused on the price and volatility of cryptocurrencies themselves, we believe the broader opportunity — leveraging blockchain technology for payments, contracts and consumption broadly — has not yet been priced in.”

Notably, BlackRock has not always been so upbeat about the emerging market in the past. Larry Fink, the company's CEO, has downplayed the excitement around digital assets in recent pronouncements. All of that has altered this year, particularly in light of the ongoing war in Europe. Following the invasion of Ukraine, as reported last month, the CEO disclosed that new use cases for current digital assets like Bitcoin, as well as the underlying technology, may emerge.

The Asset Manager BlackRock Isn't the Only One Offering Blockchain Exposure

It's important to note that BlackRock isn't the only asset manager with a blockchain ETF on the market. BlackRock's blockchain ETF debut comes just days after Fidelity unveiled comparable offerings. Fidelity and BlackRock also invested in a capital round for Circle, the creators of the USDC stablecoin, earlier this month. Despite the crypto market's poor performance this year, both companies appear to have no plans to scale back their involvement in the blockchain industry.

"We have strong conviction that we're at an inflection point, this confluence of factors is coming together," Rachel Aguirre, BlackRock's head of US iShares products, said at an event on Wednesday, adding, "Now is the time for investors to capture what we see as going to be exponential growth from here."