ByCoinGape
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BlackRock, the world’s largest asset manager with $15.34 trillion in assets under management (AUM), has revealed an ambitious roadmap for its digital assets business.
The tradfi giant is now targeting $500 million in annual revenue from digital assets by 2030.
This comes as even though critical but digital assets still remain a relatively small part of BlackRock’s overall business. The asset manager generated $7.08 billion in revenue during the second quarter. But the digital assets segment contributed only about $40 million in base fees despite managing $48.8 billion in assets. But now the tradfi giant aims to expand it.
Speaking during BlackRock’s Q2 earnings call, CFO Martin Small said the asset manager aims to build a $500 million annual digital assets business by 2030 through three key pillars.
This includes by expanding regulated crypto investment products, becoming the “stablecoin reserve manager of choice”. It also aims to target tokenizing long-term investment products such as Treasury funds, iShares ETFs and private markets.
So the first pillar of BlackRock’s strategy is growing its portfolio of regulated crypto investment products.
The company already manages the iShares Bitcoin Trust (IBIT), iShares Ethereum Trust (ETHA) and BUIDL. Its tokenized U.S. Treasury fund that has emerged as one of the largest tokenized money market funds globally.
BlackRock is also expanding its crypto ETF lineup. It recently moved closer to launching its Bitcoin Premium Income ETF (BITA), an options-based product designed to generate yield from Bitcoin
According to BlackRock’s Q2 earnings report, the firm’s digital asset business managed $48.84 billion in AUM at the end of June. Despite $3.12 billion in quarterly net outflows amid broader crypto market weakness, the segment still generated approximately $40 million in base fee revenue during the quarter.
Unlike crypto exchanges that primarily depend on trading volumes, BlackRock earns recurring management fees based on assets invested in its products. As institutional adoption of Bitcoin, Ethereum and tokenized funds expands, those fees are expected to become an increasingly important revenue stream.
The second part that CFO Martin highlighted is BlackRock’s digital asset strategy focuses on stablecoins.
During the earnings call, he revealed that BlackRock currently manages around $60 billion of reserves backing Circle’s USDC stablecoin.
While stablecoins are often viewed as payment tools within the crypto ecosystem, they also represent a significant asset management opportunity. Every dollar held in reserve can generate investment management fees for BlackRock. This is set to create a recurring revenue stream that does not depend on crypto price appreciation or ETF inflows.
Perhaps the most forward-looking part of BlackRock’s strategy is its effort to distribute traditional investment products through blockchain networks.
The company has already filed for two tokenized money market funds, including one where ownership shares would be recorded on the Ethereum blockchain.
“We’ve recently filed two registration statements with the SEC for tokenized money market funds,” Small said.He added that the funds are expected to support stablecoin-enabled subscriptions and redemptions and be accessible across multiple blockchain networks.
The third pillar of BlackRock’s digital asset strategy is to make traditional investment products accessible directly through blockchain networks and digital wallets.
Speaking during the Q2 earnings call, CFO Martin Small said the company wants investors to eventually buy BlackRock funds without having to move money from a crypto wallet to a traditional bank or brokerage account.
Today, investors typically follow a multi-step process. This includes transferring stablecoins from a digital wallet to an exchange, then to a bank or brokerage before investing in traditional funds. BlackRock wants to eliminate those intermediaries by enabling investments directly from blockchain-based wallets.
Its long-term vision is to allow investors to access regulated investment products directly through blockchain-based infrastructure. While the initiative begins with tokenized money market funds, the model could eventually expand to other BlackRock products, including iShares ETFs and private market investments.
If more investment products become available directly on blockchain networks, digital wallets could evolve into a new distribution channel for asset managers. This can allow firms like BlackRock to engage crypto-native investors where they already hold their capital.
Thus, for BlackRock, the strategy is ensuring its investment products remain accessible as financial markets increasingly move on-chain.
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