Updated 27 Aug, 2021

BlackRock Bought $383M of Shares in Bitcoin Mining Companies

Bitcoin Mining

Key Takeaways:

  • BlackRock revealed it has purchased shares in two cryptocurrency mining companies
  • The sizeable investment of $383m was made during the second quarter of 2021

BlackRock Invests Roughly $383m in Two Bitcoin Mining Firms

The world’s largest asset manager BlackRock revealed it has invested the significant amount of $383m in two publicly-traded bitcoin mining firms.

The filing with the Securities and Exchange Commission (SEC) shows BlackRock has acquired shares in Marathon Digital Holdings and Riot Blockchain Inc., both focused on bitcoin mining.

BlackRock, managing over $9.5tn in assets, held a 6.71% stake in Marathon Digital Holdings, or roughly $207m. Another $175m were invested in Riot Blockchain for the purchase of 6.61% of the company’s publicly-traded shares.

Finally, the total investment in the two crypto mining companies is valued at around $383m.

Shares in both firms were purchased through BlackRock exchange-traded funds (ETFs). BlackRock’s iShares Russell 2000 ETF is estimated to hold more shares in Marathon and Riot than any other ETF on the market.

Moreover, the date of the purchase is not explicitly state. It is certain the company made the investments some time between April 1 and June 30. The period was notably strong for bitcoin as its price appreciated to its record high of $64,800 on April 14.

Both Marathon Digital Holdings and Riot Blockchain have performed well throughout the year, gaining 220%, and 108%, respectively.

BlackRock is Already Familiar with Bitcoin

The sizeable investment in crypto mining companies is not BlackRock’s first foray into the crypto industry. This April, the asset management giant revealed through another filing it had bought and sold 37 bitcoin futures contracts during the first quarter of the year. According to the filing with the SEC, BlackRock had realized a profit of $360,158 by trading bitcoin futures.

BlackRock’s CEO Larry Fink recently showed he had changed his dismissive view on bitcoin by saying he the crypto asset class could become “great”.

The cryptocurrency market is not yet clearly regulated. As a result, institutional investors seek exposure to bitcoin through derivatives and bitcoin-related products. These include bitcoin futures or the purchase of companies that own bitcoin or mine the digital currency.

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