Blackstone, recognized as the world’s largest alternative asset manager, has made its initial investment in the cryptocurrency sector by purchasing shares of BlackRock’s spot Bitcoin exchange-traded fund (ETF), known as IBIT. This move signals a growing acceptance of Bitcoin as an investment asset, even within traditional financial institutions.
Blackstone’s Crypto Investment Details
According to a filing with the U.S. Securities and Exchange Commission (SEC) on May 20, Blackstone’s investment amounted to approximately $1.08 million. This represents a small fraction of Blackstone’s extensive $1.2 trillion portfolio. As of March 31, Blackstone held 23,094 shares of BlackRock’s iShares Bitcoin Trust ETF (IBIT). These shares were incorporated into Blackstone’s Alternative Multi-Strategy Fund (BTMIX), which holds a total of $2.63 billion in assets.
In addition to the IBIT investment, the filing revealed that Blackstone also acquired 4,300 shares in crypto ATM operator Bitcoin Depot Inc. (BTM) for $6,300 and spent $181,166 on 9,889 shares of the ProShares Bitcoin ETF (BITO).
Blackstone’s Evolving Stance on Crypto
Despite being an ‘alternative asset manager,’ Blackstone has historically maintained a cautious approach to cryptocurrency. In September 2019, CEO Steve Schwarzman expressed his appreciation for blockchain technology but questioned its suitability for creating money. He stated a preference for centralized control over currencies, admitting that he struggled to fully understand the intricacies of crypto technology.
Comparison with Wisconsin Investment Board
Interestingly, the Wisconsin Investment Board (one of the first state investment funds to provide Bitcoin exposure to US retirees) reported on May 15 that it sold all 6,060,351 of its IBIT shares, valued at $3.7 billion, during the first quarter.
BlackRock’s IBIT Performance and Inflows
BlackRock’s Bitcoin fund, IBIT, has demonstrated strong performance, recording continuous inflows for six consecutive weeks since April 9, according to data from Farside Investors. The ETF has experienced a 20-trading-day streak of inflows, accumulating a total net inflow of over $46.1 billion since its launch in January 2024. This positions IBIT as a leading Bitcoin ETF in terms of attracting investment capital.
In comparison, the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARK) have seen all-time net inflows of $11.8 billion and $2.8 billion, respectively, trailing IBIT’s performance.
Key Takeaways:
- Blackstone’s investment: Marks their first entry into the crypto market via Bitcoin ETFs.
- Investment size: A $1.08 million investment in IBIT, a small portion of their overall portfolio.
- IBIT Performance: IBIT has seen significant inflows and strong performance since its launch.
- Contrasting Moves: The Wisconsin Investment Board liquidated its IBIT holdings.
- Schwarzman’s Perspective: Historically skeptical, his company’s investment suggests a potential shift in view or diversification strategy.
This investment by Blackstone signals a growing acceptance and integration of Bitcoin into mainstream finance. While the amount is relatively small, it represents a symbolic step and could pave the way for larger institutional investments in the future. This move could have a positive impact on the Bitcoin market and the broader cryptocurrency ecosystem.
