Bloomberg&'s analyst has warned of a potential threat to the Bitcoin ecosystem related to BlackRock&'s investments in the crypto industry. In 2020, the firm started to scoop up stakes in Bitcoin mining companies, acquiring 6.71% in Marathon Digital Holdings and 6.61% in Riot Blockchain.
BlackRock is not the only legacy finance giant pushing ahead in the crypto industry. Other behemoths, including Vanguard, State Street, and Fidelity, have also been making big moves in the mining space and other blockchain-related markets.
According to the Twitter post published by Jamie Coutts, Bloomberg&'s crypto market analyst, the largest global asset managers have become the dominant investors in the three biggest publicly traded miners, which collectively account for 8.9% of the global hash.
Institutions have been "penetrating" the mining market for a few years, despite many of their representatives claiming that Bitcoin is "worthless," like J.P. Morgan CEO Jamie Dimon.
Institutional investors in the mining sector include asset management companies, investment banks, financial services firms, and hedge funds. Overall, institutions account for over 25% of ownership in leading mining enterprises, such as Riot Blockchain, Marathon Digital Holdings, CleanSpark.
Coutts highlights the fact that the big finance top trio continued to invest in public miners in 2022 after the bull run was over and many miners faced economic hardships. Vanguard has been leading the way, with BlackRock keeping right behind.
The analyst disclaims any intentions to cause FUD, waving off "51% attack" anxieties. Still, he points to the risk of "creeping influence that might conflict with the values of the network," hinting at potential censorship of transactions – which wouldn&'t prevent the chain from operating, though, as other miners could still process censored transactions.
Coutts also stresses that BlackRock and the rest of the pack have displayed "activist tendencies," which leads to the conclusion that their intentions toward Bitcoin miners may not be "passive in nature."
Last month, Vivek Ramaswamy, a Republican candidate in the 2024 presidential campaign, took a shot at the biggest money managers, posting a tweet with a claim that "BlackRock, State Street, & Vanguard represent arguably the most powerful cartel in human history."