BlackRock’s digital asset products attracted around $15 billion in net inflows over the past year, but falling cryptocurrency prices caused the total value of those assets to decline significantly.
The asset management giant’s crypto business experienced a sharp drop despite continued investor demand, highlighting how heavily its digital asset portfolio remains tied to market performance.
BlackRock reported that its digital asset holdings fell to $48.8 billion at the end of the second quarter, down from $79.6 billion a year earlier. The decline represents a nearly 39% decrease in the value of its crypto-related assets.
The drop occurred even though BlackRock’s crypto products received $15.1 billion in net inflows over the previous 12 months. However, those gains were overwhelmed by approximately $45.8 billion in losses caused by declining asset prices, according to the company’s filing.
The pressure continued in the second quarter, with BlackRock’s digital asset offerings seeing $3.1 billion in net outflows.
The weaker performance reflected broader struggles across crypto markets. Bitcoin (BTC) and ether (ETH) both faced selling pressure during the quarter, with bitcoin declining more than 14% and ether falling 25% as both assets struggled to recover from earlier losses.
The downturn in crypto contrasted with BlackRock’s overall performance. The firm reported record assets under management of $15.3 trillion after attracting $192 billion in quarterly net inflows. It also surpassed analyst expectations, posting adjusted earnings per share of $13.91 on revenue of $7.08 billion.
BlackRock shares gained 4.15% to trade at £1,068 in pre-market activity on Wednesday.
BlackRock’s long-term crypto strategy
BlackRock said it is targeting $500 million in annual revenue from its digital asset division by 2030 as part of its broader expansion plans.
The goal would mark more than a tenfold increase from the approximately $40 million the firm currently generates from crypto-related base fees and securities lending, which represent less than 1% of its overall fee income.
Since launching its spot bitcoin ETF (IBIT) and spot ether ETF (ETHA) in 2024, BlackRock has continued expanding its crypto product lineup. The firm recently introduced the iShares Bitcoin Income ETF (BITY), which uses covered call strategies on bitcoin exposure to provide investors with an income-focused product rather than simply tracking BTC prices.
The company also manages about $60 billion of Circle’s reserves, giving it exposure to roughly one-quarter of the $300 billion stablecoin market. BlackRock said it aims to become a preferred reserve manager for the growing stablecoin sector.
During its earnings call, BlackRock identified the roughly 5 billion crypto wallets worldwide as a potential new distribution channel for traditional investment products.
Martin Small, the company’s chief financial officer, said these wallet users could become future customers for model portfolios, managed accounts and tokenized investment solutions. He added that BlackRock wants to build a digital wallet-native asset management platform.
