In April 2009, American businessman and investor Rob Kapito went to the most important Yankees game of his life.
It wasn’t important for anything the Yankees were doing. It was a “secret mission” that had more to do with the person Kapito was meeting…
If Rob succeeded, he’d put his company in a position to take over the financial world.
I know it sounds a bit dramatic, but opportunity was at hand.
April 2009 was the middle of the Great Recession.
It was too early to know that the markets had already bottomed… and some firms were still in trouble.
Multinational bank Barclays was one of them. It had acquired parts of Lehman Brothers in September 2008. Now the troubled firm was dragging the company down.
It was so bad Barclays was willing to sell anything… even its rapidly growing exchange-traded fund (ETF) unit.
In fact, they already had a deal with London private-equity firm CVC… But fortunately for Kapito and his firm, the deal had a 45-day “go-shop” provision.
Barclays could seek out or accept a better deal if one came along. And that was the goal of Kapito’s secret mission.
So, he scalped a ticket and found his way to Barclays CEO Bob Diamond in the Barclays corporate box.
The Yankees had lost by the end of the night… but Rob Kapito won. And so did his firm, BlackRock.
Two months later, the companies announced the $15 billion deal. BlackRock now owned Barclays’ ETF division, including the iShares collection of ETFs.
At the time, iShares held about $300 billion in assets under management (AUM)… Today that number is just over $2 trillion.
That’s an impressive return on a $15 billion acquisition… but it’s not the reason I’m sharing Kapito’s story with you today.
I’m telling you this because BlackRock is betting big again, and the repercussions could be just as rewarding for investors.
From ETFs to BTC
Founded in 1988 by Larry Fink, BlackRock has become the largest asset management firm in the world.
In fact, it currently has over $10 trillion in AUM. That’s bigger than the GDP of most countries.
A large part of that comes from the iShares ETFs it bought from Barclays, which makes up over 20% of its assets.
But now BlackRock is entering a new business… crypto. And these holdings could become even more valuable than its ETFs.
You see, Fink and BlackRock didn’t get to $10 trillion by accident.
From the beginning, BlackRock was known for its excellent risk management and deep knowledge of credit markets… and this experience has bolstered the company’s reputation since 1988.
For example, during the savings-and-loan crisis of the late 1980s, BlackRock helped the Federal Deposit Insurance Corp. evaluate and liquidate its loan portfolio.
It also helped former General Electric unit Kidder Peabody liquidate a troubled portfolio in 1994.
And during the Great Recession, it helped multiple firms… Like when the government stepped in to rescue AIG and selected BlackRock to manage the portfolios.
BlackRock is not only the biggest asset management firm in the world. It also has a stellar reputation.
So it’s a big deal when this venerable firm enters a new line of business.
And it’s not getting into crypto in a small way. According to Fink, he sees “huge opportunities” for digital currency and the crypto space.
- The firm is now in the process of launching the iShares Blockchain and Tech ETF… a crypto-themed ETF that will invest in companies involved in the blockchain space.
- BlackRock also owns 16.3% of MicroStrategy, the software company that owns over 124,000 BTC…
- It has an internal group of at least 20 employees working on crypto…
- And it plans to bring crypto trading to its institutional clients and allow them to borrow against their assets.
This is a huge boon to the crypto industry.
Not only will BlackRock’s $10 trillion in assets get exposure to the blockchain, but it will also inspire other asset managers to enter the industry.
BlackRock’s ETF Is Big News… But You Can Do Better
If you pay attention to the markets, you know that bitcoin and crypto have been down 25% or more since the start of the year…
You’ve probably felt the volatility we’ve seen in the last few months, too.
But as Daily editor Teeka Tiwari says, “volatility is the price we pay for the chance at life-changing gains.”
We’ve seen multiple 50% drawbacks in bitcoin – and the broader crypto market – only to see them surge to new all-time highs.
This difference now is that institutional adoption continues at record levels despite all the geopolitical turmoil.
The smartest money in the world is investing in the crypto ecosystem… It’s bringing new crypto products to the masses… It’s creating greater income-producing opportunities than traditional finance.
And it’s why Teeka predicts bitcoin will eventually hit $500,000… and Ethereum $10,000 in the coming years.
So while BlackRock isn’t the first institution to bet big on crypto… it is one of the biggest in terms of its expertise and AUM.
It’s only a matter of time before the market catches on again and crypto makes its next move higher.
If you’re not already invested, consider buying some bitcoin and Ethereum today.
Over the next few years, we expect ETH to grow 10x – or more – from today’s prices… and we think bitcoin will do just as well… especially following the recent dip in crypto.
So a small $200 position is a good entry point for most investors.
But if you’re looking to take your crypto investments a step further, consider this…
Teeka believes you’ll see some of the fastest gains in history if you invest in the foundational cryptos and companies leading NFT and metaverse development…
Some of the same projects and cryptos that could end up in BlackRock’s crypto ETF.
These NFT projects are booming in price, despite the recent plunge in crypto… and a coming catalyst is about to accelerate their adoption and send prices through the roof.
Remember… when an institution like BlackRock bets big, it’s worth paying attention. Its iShares ETFs are popular investments that have exploded in value over the years.
We expect nothing less when its iShares Blockchain and Tech ETF hits the market.
The best way to prepare is to get positioned now. Because once Main Street money starts pouring in, prices will have nowhere to go but up.
Analyst, Palm Beach Daily