Blackstone Makes Its First Foray into Cryptocurrency with $1 Million Bitcoin ETF Purchase
In a significant development within the financial sector, Blackstone, known as "the world’s largest alternative asset manager,” has recently disclosed its inaugural investment in cryptocurrency. According to a filing made with the U.S. Securities and Exchange Commission (SEC) on May 20, 2024, Blackstone acquired shares in BlackRock’s spot Bitcoin exchange-traded fund (ETF), totaling approximately $1.08 million as of March 31, 2024. ## Details of the Investment
Blackstone’s entry into the cryptocurrency space includes a holding of 23,094 shares in BlackRock’s iShares Bitcoin Trust ETF (IBIT). This investment has been made through Blackstone’s Alternative Multi-Strategy Fund (BTMIX), which manages assets worth $2.63 billion, as reported by Google Finance data. In addition to the Bitcoin ETF investment, Blackstone also purchased 4,300 shares in Bitcoin Depot Inc., a crypto ATM operator, at a cost of $6,300, and spent $181,166 on 9,889 shares of the ProShares Bitcoin ETF (BITO).
Although the $1 million investment is relatively modest compared to Blackstone’s overall portfolio, which stands at roughly $1.2 trillion, it marks a notable pivot, given the firm’s prior hesitance regarding cryptocurrency investments.
Historical Context
Historically, Blackstone has been wary of cryptocurrency. In September 2019, CEO Steve Schwarzman expressed skepticism about Bitcoin, emphasizing his belief that a trusted authority was necessary for currency control. He previously voiced a lack of interest in cryptocurrencies, citing difficulties in understanding the technology.
Despite this, Blackstone has been actively involved in diverse sectors including private equity, real estate, credit, infrastructure, hedge funds, and insurance solutions. As of March 31, the company held $37 billion in investable capital.
Market Trends
On the macro level, the momentum for Bitcoin investments continues to build. Following Blackstone’s entry, the state of Wisconsin Investment Board, one of the early state pension funds to gain Bitcoin exposure, opted to liquidate all its shares in the IBIT for a total worth of $3.7 billion during the first quarter. Interestingly, data from Farside Investors reveals that BlackRock’s Bitcoin fund has reported no outflows in the past six weeks, maintaining a streak of inflows for 20 consecutive trading days. Since its launch in January 2024, the IBIT has attracted over $46.1 billion in net inflows, significantly outpacing other Bitcoin ETFs such as the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARK), which have seen inflows of $11.8 billion and $2.8 billion, respectively.
Conclusion
The steps taken by Blackstone in entering the cryptocurrency market could influence other institutional investors and traditional financial entities as they reassess their investment strategies in this evolving landscape. As Blackstone integrates these new assets, market watch will be keen to see how this impacts the firm’s strategy and the broader acceptance of cryptocurrency in mainstream finance.
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