Key facts
- BlackRock's digital asset funds decreased by 39% to $48.8 billion from $79.6 billion over the past year.
- Despite $15.1 billion in net inflows over 12 months, market depreciation of $45.8 billion led to the decline.
- The firm experienced $3.1 billion in net outflows from digital asset products in the second quarter.
- Bitcoin and ether prices fell significantly during the second quarter.
- BlackRock's overall assets under management hit a record $15.3 trillion.
- The company targets $500 million in annual revenue from its crypto business by 2030.
BlackRock's digital asset business experienced a significant contraction over the past year, with its crypto products falling by nearly 39% to $48.8 billion from $79.6 billion, despite attracting $15.1 billion in net inflows. This decline was primarily driven by $45.8 billion in market depreciation, underscoring the strong correlation between the firm's crypto ETF performance and digital asset prices.
The trend continued into the second quarter, which saw $3.1 billion in net outflows from BlackRock's digital asset products. This period coincided with a weaker crypto market, as Bitcoin and Ether prices declined by over 14% and 25% respectively during the quarter.
In contrast, BlackRock's overall business reported record assets under management of $15.3 trillion, with $192 billion in net inflows. The company also surpassed Wall Street earnings expectations, posting adjusted earnings per share of $13.91 on $7.08 billion in revenue.
Looking ahead, BlackRock aims to generate $500 million in annual revenue from its crypto business by 2030, a tenfold increase from its current revenue of approximately $40 million from base fees and securities lending. The firm has been expanding its crypto ETF offerings, including the iShares Bitcoin Income ETF (BITY), and manages a portion of Circle's stablecoin reserves. BlackRock's CFO, Martin Small, expressed a desire to become the industry's reserve manager of choice and to utilize the 5 billion crypto wallets as a distribution channel for traditional investment products.