Last Updated: 29 August 2022
On 4 August, it was announced that US crypto exchange Coinbase and the world’s largest asset manager BlackRock, are working together to make bitcoin more accessible to institutional investors. According to Anthony Scaramucci, too little attention is paid to this unique collaboration.
Scaramucci was the White House Director of Communications for the White House and is the founder and managing partner of investment firm SkyBridge Capital. His fund focuses on alternative investments.
Importance for bitcoin
He was a guest on CNBC and discussed the importance of the collaboration between Coinbase and BlackRock.
People don’t pay close enough attention to what BlackRock is doing. When Larry Fink and his team set up a product related to Bitcoin, it tells you there is institutional demand. Whether they have a positive or negative opinion of Bitcoin, it doesn’t matter.’
Give the ducks bitcoin
In the distant past, Scaramucci also worked at investment bank Goldman Sachs.
“There’s an expression back at Goldman Sachs in the early 90s: ‘feed the ducks.’ If the ducks want Bitcoin, set up a product and feed the ducks. And so I think this is a huge thing that just doesn’t get as much attention as it should.”
What is BlackRock?
Founded in 1988, BlackRock started with just eight people working in one room. In 2006, BlackRock acquired Merrill Lynch Investment Management. Then in 2009, it acquired Barclay’s Global Investors (BGI), becoming the world’s largest asset manager. By the end of the second quarter of 2022, BlackRock had $8.48 trillion in assets under management.
On August 4, Coinbase’s Brett Tejpaul and Greg Tusar published a blog post, saying that “Coinbase and BlackRock are creating new entry points for institutional crypto adoption by connecting Coinbase Prime and Aladdin.”
It goes on to say that “Coinbase is partnering with BlackRock, the world’s largest asset manager, to offer institutional clients of Aladdin, BlackRock’s end-to-end investment management platform, direct access to crypto, starting with bitcoin, through connectivity to Coinbase Prime.”
Apparently, Coinbase Prime will “provide crypto trading, custody, prime brokerage and reporting capabilities to Aladdin’s institutional client base, which is also a Coinbase customer.”
Bitcoin not yet a hedge against inflation
Back to the interview with Scaramucci. He goes on to say that investing in bitcoin to preserve value during the current inflationary situation is not a good strategy at the moment. He thinks bitcoin is not mature enough yet.
As with some of his previous public appearances, Scaramucci says that bitcoin is still in its infancy and that, like any innovation, it needs time to overcome its volatility and position itself as a preferred investment choice.
Five times more bitcoin wallets
Anthony Scaramucci says bitcoin can only be a hedge against inflation when there are one billion wallets.
We are still a long way from that. According to this website, there are currently 200 million wallets distributed among 160 million bitcoin users. Of these, 400 thousand are actively using bitcoin every day.
A bitcoin user can have more than one wallet: one to trade bitcoin and another account to store it for the long term.