BlackRock's Bitcoin, Ethereum Holdings Value Sees 39% Decrease Despite ETF Inflow Boom

BlackRock (NYSE:BLK) on Wednesday reported that its digital asset products fell 39% to $48.8 billion over the past year despite, pulling in $15.1 billion in net inflows as falling crypto prices wiped out far more than investors put in.

$45.8 Billion In Market Losses Wiped Out Every Dollar Of New Money

BlackRock attracted $15.1 billion in fresh crypto capital over 12 months, but $45.8 billion in market depreciation overwhelmed every dollar of those inflows, shrinking the business from $79.6 billion to $48.8 billion.

The second quarter made things worse.

Digital asset products recorded $3.1 billion in net outflows as Bitcoin (CRYPTO: BTC) fell 14% and Ethereum (CRYPTO: ETH) dropped 25% over the period.

What Does BlackRock’s Broader Business Look Like?

Crypto was the one weak spot in an otherwise record quarter.

BlackRock posted $15.3 trillion in total assets under management after attracting $192 billion in net inflows, beating Wall Street expectations with adjusted earnings per share of $13.91 on $7.08 billion in revenue. 

Crypto currently generates $40 million in base fees and securities lending, less than 1% of total fee revenue. 

BlackRock is targeting $500 million in annual crypto revenue by 2030, a more than tenfold increase from today.

What Is BlackRock’s Long-Term Crypto Bet?

BlackRock is doubling down rather than pulling back. The firm manages $60 billion of Circle’s (NYSE:CRCL) stablecoin reserves, roughly one quarter of the $300 billion stablecoin market, and wants to become the industry’s dominant reserve manager.

Chief Financial Officer Martin Small pointed to 5 billion crypto wallets as a new distribution channel for traditional investment products. 

“We want to build a digital wallet native asset manager,” Small said on the earnings call.

BlackRock also recently launched the iShares Bitcoin Income ETF (NASDAQ:BITY), which writes covered call options on Bitcoin exposure to generate income rather than simply tracking price, expanding beyond its existing IBIT and ETHA lineup.

Where Does BLK Stand Technically?

BLK trades at $1,094.68, sitting 7.9% above its 20-day SMA at $1,012.78 and 3.1% above its 200-day SMA at $1,059.81. 

MACD sits above its signal line with a positive histogram, pointing to improving momentum after the earnings pop.

Key levels for BLK

• $1,107.50 — resistance just above current price where the rally may stall
• $1,030.00 — support near the 50-day SMA, first line of defense on any pullback

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