BlackRock Partners With Anchorage Digital for Ethereum ETF Custody

BlackRock, the world’s largest asset manager, has selected Anchorage Digital to provide custody services for its Bitcoin and Ethereum exchange-traded funds (ETFs). This strategic move, revealed through recent SEC filings, highlights BlackRock's commitment to enhancing its risk management in the digital asset space.

Key Takeaways

• BlackRock will utilize Anchorage Digital to safeguard Bitcoin and Ethereum for its ETFs.

• Anchorage Digital specializes in cryptocurrency custody, staking, and trading.

• The partnership reflects BlackRock's ongoing strategy to expand its presence in the digital asset market.

BlackRock's Digital Asset Strategy

BlackRock's decision to partner with Anchorage Digital comes as part of its broader strategy to manage risks associated with digital assets. The firm has already established a relationship with Coinbase for custody services, but the addition of Anchorage signifies a diversification of its custodial options.

• Custody Accounts: BlackRock may use multiple custody accounts at Anchorage to manage assets for its iShares Bitcoin Trust ETF (IBIT) and iShares Ethereum Trust ETF (ETHA).

• Risk Management: This arrangement underscores BlackRock's proactive approach to risk management in the rapidly evolving digital asset landscape.

Anchorage Digital's Role

Anchorage Digital is a digital asset trust bank that offers a range of services tailored to the needs of institutional clients. The firm is authorized to hold cryptocurrencies on behalf of clients and provides additional services such as staking and trading.

• Specialization: Anchorage focuses on safeguarding digital assets, which positions it as a key player in the cryptocurrency custody market.

• Regulatory Approval: The firm received its federal charter from the Office of the Comptroller of the Currency (OCC) in January 2021, enhancing its credibility and operational capabilities.

Future Implications

The partnership between BlackRock and Anchorage Digital is expected to set a new standard for institutional access to digital assets. As demand for cryptocurrency investment continues to grow, this collaboration may pave the way for more asset managers to explore similar custodial arrangements.

• Client Demand: Nathan McCauley, co-founder and CEO of Anchorage, expressed excitement about meeting client demand for digital assets, indicating a strong market interest.

• Competitive Landscape: Other asset managers, such as VanEck and Fidelity, have also established custodial relationships with various crypto exchanges, highlighting the competitive nature of the market.

Conclusion

BlackRock's partnership with Anchorage Digital marks a significant step in the asset manager's journey into the digital asset space. By leveraging Anchorage's expertise in cryptocurrency custody, BlackRock aims to enhance its offerings and meet the growing demand for digital asset investment among institutional clients. As the landscape evolves, this collaboration could influence how other financial institutions approach digital asset custody and management.

Sources

• News Explorer — BlackRock Adds Anchorage Digital to Custody Bitcoin, Ethereum ETF Assets, Decrypt.

• BlackRock Taps Anchorage Digital as Bitcoin, Ethereum ETF Custodian, Decrypt.