BlackRock’s Crypto Holdings Slide 39% Despite $15B in Investor Inflows

BlackRock’s digital asset products attracted billions in new investor capital over the past year, but the decline in cryptocurrency prices significantly reduced the overall value of those holdings.

The world’s largest asset manager saw its digital asset portfolio contract sharply despite continued demand for its crypto offerings, highlighting the strong impact market prices have on the firm’s cryptocurrency business.

According to BlackRock’s latest earnings report, digital asset products totaled $48.8 billion at the end of the second quarter, down from $79.6 billion a year earlier—a decline of nearly 39%.

The decrease occurred even as the products received $15.1 billion in net inflows over the past 12 months. However, those gains were outweighed by approximately $45.8 billion in market-related losses, demonstrating how closely BlackRock’s crypto ETF performance remains linked to broader digital asset price movements.

The pressure persisted during the second quarter, with BlackRock’s digital asset products experiencing $3.1 billion in net outflows.

The decline came amid a challenging period for cryptocurrency markets. Bitcoin (BTC) and ether (ETH) both struggled during the quarter, with bitcoin falling more than 14% and ether dropping 25% as they continued to recover from earlier losses.

The performance stood in contrast to BlackRock’s wider business, which reached a record $15.3 trillion in assets under management after receiving $192 billion in net inflows during the quarter. The company also exceeded Wall Street forecasts, reporting adjusted earnings per share of $13.91 on revenue of $7.08 billion.

BlackRock shares rose 4.15% to £1,068 in pre-market trading on Wednesday.

BlackRock’s crypto growth ambitions

BlackRock said it is aiming to generate $500 million in annual revenue from its digital asset business by 2030 as part of its long-term growth strategy.

That target would represent more than a tenfold increase from the roughly $40 million the firm currently earns through base fees and securities lending from crypto products, which account for less than 1% of total fee revenue.

The asset manager has expanded its cryptocurrency ETF offerings since launching its spot bitcoin ETF (IBIT) and spot ether ETF (ETHA) in 2024. More recently, it introduced the iShares Bitcoin Income ETF (BITY), which uses covered call strategies on bitcoin exposure to provide investors with an income-focused alternative to traditional crypto tracking products.

BlackRock also manages around $60 billion of Circle’s reserves, representing roughly one-quarter of the $300 billion stablecoin market, as it seeks to position itself as a leading reserve manager for the sector.

During its earnings call, the company highlighted the potential of billions of crypto wallets as a new distribution channel for traditional investment products.

Martin Small, BlackRock’s chief financial officer, said these users could become future customers for model portfolios, managed accounts and tokenized investment products, adding that the company aims to become a digital wallet-native asset manager.