Blackstone Takes a Dip into Crypto
In a move that could ripple through the world of traditional finance, Blackstone, the self-proclaimed “world’s largest alternative asset manager,” has made its first-ever foray into the cryptocurrency market. The company disclosed a purchase of shares in BlackRock‘s spot Bitcoin exchange-traded fund (ETF), marking a symbolic entry into the digital asset space.
However, the investment, reported in a May 20 filing with the US Securities and Exchange Commission, is relatively modest, amounting to approximately $1.08 million. This represents a tiny fraction of Blackstone‘s massive $1.2 trillion portfolio. The company reportedly held 23,094 shares of BlackRock‘s iShares Bitcoin Trust ETF (IBIT) as of March 31, adding them to its Alternative Multi-Strategy Fund (BTMIX), which manages $2.63 billion in assets.
While the investment may seem small, it signals a potential shift in Blackstone‘s stance on crypto. In 2019, the company’s CEO, Steve Schwarzman, expressed skepticism about the technology, describing its use as money as “pretty odd.” His reservations stemmed from the lack of traditional regulatory oversight in the crypto space, a common concern among institutional investors.
Contrasting Approaches: Blackstone vs. Wisconsin
The news of Blackstone‘s foray into crypto comes against the backdrop of a recent divestment by the state of Wisconsin. On May 15, the Wisconsin Investment Board, which manages pension funds for state employees, reported that it had sold off its entire Bitcoin ETF holding, consisting of 6,060,351 IBIT shares worth $3.7 billion. This move highlights the ongoing debate surrounding crypto‘s place within traditional financial institutions. While Blackstone sees potential in Bitcoin, the Wisconsin Investment Board has taken a more cautious approach, choosing to exit its crypto position.
Growing Institutional Interest Despite Skepticism
Despite the contrasting approaches, BlackRock‘s Bitcoin fund continues to attract interest from institutional investors. Farside Investors data reveals that the fund has experienced a 20-trading-day streak of inflows since April 9, with a total net inflow exceeding $46.1 billion since its launch in January 2024. This trend suggests a growing appetite for Bitcoin among institutions, even as some remain hesitant about its long-term prospects.
Blackstone‘s investment, while modest, is a significant step in the world of traditional finance. It signals that even the most conservative institutions are beginning to acknowledge the potential of crypto, albeit cautiously. As more institutional players enter the market, the cryptocurrency landscape is likely to continue to evolve, with both opportunities and challenges on the horizon.
