BlackRock's digital asset funds fell to $48.8 billion at the end of the second quarter from $79.6 billion a year earlier, a decline of nearly 39%, even as the products attracted $15.1 billion in net inflows over the past 12 months. The drop was driven by $45.8 billion in market losses that more than offset new investor money, according to the firm's latest earnings release.
Crypto market downturn weighs on BlackRock's digital assets
The weakness continued in the second quarter, when BlackRock's digital asset products recorded $3.1 billion in net outflows. The decline came during a weaker period for crypto markets, with Bitcoin and other major tokens falling from their peaks. The figures underscore how closely BlackRock's crypto ETF business remains tied to digital asset prices, despite steady investor interest.
Contrast with record firmwide results
The digital asset slump contrasts sharply with BlackRock's broader business, which posted record assets under management of $15.3 trillion after attracting $192 billion in net inflows during the quarter. The company also beat Wall Street expectations with adjusted earnings per share of $13.91 on $7.08 billion in revenue. BLK shares traded 4.15% higher in pre-market trading following the release.
Long-term crypto ambitions remain intact
BlackRock is targeting $500 million in annual revenue from its digital asset business by 2030, a more than tenfold increase from the current $40 million in base fees and securities lending. The firm has steadily expanded its crypto ETF lineup since listing its spot bitcoin ETF (IBIT) and spot ether ETF (ETHA) in 2024, and recently introduced the iShares Bitcoin Income ETF (BITY), which generates income through covered call options on bitcoin exposure. BlackRock also manages $60 billion of Circle's reserves, about one-quarter of the $300 billion stablecoin market, and aims to become the industry's reserve manager of choice. During the earnings call, CFO Martin Small highlighted 5 billion crypto wallets as a new distribution channel, saying, "They're all potential new users of model portfolios. We want to build a digital wallet native asset manager."