BlackRock's digital asset business reported $48.8 billion in products at the end of the second quarter, down from $79.6 billion a year earlier, marking a decline of nearly 39% despite $15.1 billion in net inflows over the past 12 months. The contraction resulted from $45.8 billion in market depreciation that more than offset investor inflows, driven by bitcoin falling over 14% and ether dropping 25% during the quarter. The performance underscores how crypto ETF economics remain tied to underlying asset prices rather than cumulative investor demand, with BlackRock's digital asset segment generating approximately $40 million in current annual revenue while targeting $500 million by 2030.
BlackRock Digital Asset Business Records 39% Decline Despite Investor Inflows
BlackRock's digital asset products contracted from $79.6 billion to $48.8 billion over the past year, representing a 38.7% decline. The firm recorded $15.1 billion in net inflows during the 12-month period, but market depreciation of $45.8 billion more than offset new investor capital.
The second quarter added flow pressure to the price-driven decline. BlackRock's digital asset products recorded $3.1 billion in net outflows during the quarter. Bitcoin fell more than 14% during the period, while ether dropped 25%.
BlackRock reported record assets under management of $15.3 trillion after attracting $192 billion in net inflows during the quarter. The company beat Wall Street expectations with adjusted earnings per share of $13.91 on $7.08 billion in revenue. Digital assets currently account for less than 1% of total fee revenue, with BlackRock generating about $40 million from digital asset base fees and securities lending.
BlackRock Targets $500 Million Annual Crypto Revenue by 2030
BlackRock is targeting $500 million in annual revenue from its digital asset business under its 2030 plan, representing more than a tenfold increase from current levels. The firm launched its spot bitcoin ETF and spot ether ETF in 2024 and has continued to expand its digital asset product lineup.
The company's iShares Bitcoin Income ETF is designed to generate income by writing covered call options on bitcoin exposure. The product offers investors an alternative approach from tracking bitcoin's spot price.
Chief Financial Officer Martin Small stated the company wants to build a digital wallet native asset manager. BlackRock pointed to 5 billion crypto wallets as a potential distribution channel for traditional investment products, including model portfolios, separately managed accounts, and tokenized formats.
BlackRock Manages $60 Billion in Circle Stablecoin Reserves
BlackRock manages $60 billion of Circle's reserves, representing approximately one-quarter of the $300 billion stablecoin market. The company is positioning itself as a reserve manager for the stablecoin industry, expanding beyond price-linked crypto funds into digital asset infrastructure.
FAQ
Why did BlackRock's digital asset business decline despite receiving investor inflows?
BlackRock's digital asset products declined from $79.6 billion to $48.8 billion over the past year because $45.8 billion in market depreciation from falling bitcoin and ether prices more than offset $15.1 billion in net investor inflows. Bitcoin fell over 14% and ether dropped 25% during the second quarter.
What is BlackRock's revenue target for its digital asset business?
BlackRock is targeting $500 million in annual revenue from its digital asset business by 2030, compared to approximately $40 million currently generated from base fees and securities lending. The company launched spot bitcoin and ether ETFs in 2024 and continues to expand its crypto product lineup.
