BlackRock Lost 24M in FTX Collapse: (NYSE:BLK) Stock Crashes 21%

BlackRock Lost 24M in FTX Collapse: (NYSE:BLK) Stock Crashes 21%
BlackRock (NYSE:BLK) Stock Crashes 21% amid 24M lost in FTX Collapse:

Lucknow(Coinchapter.com): The FTX meltdown has not even spared world’s largest asset manager, BlackRock.

Blackrock lost $24M due to FTX
Source: https://twitter.com/WhaleChart/status/1597975529755652096

Speaking to New York Times, Larry Fink, CEO of BlackRock, said that the firm lost $24 Million once the FTX platform collapsed. Although Fink confirmed that Blackrock did its due diligence before investing in FTX, he also claimed that FTX might have engaged in “some misbehaviors of major consequences”.

Fink also claimed that U.S.-based venture capital firm Sequoia was in a similar situation like Blackrock.

“I am sure they did the due diligence…Could they have been misled? Could they have done other things? Could we have been misled? Sure… but until we have more facts I’m not gonna speculate” said Fink to NY Time’s Andrew Ross Sorkin.

BlackRock takes time with crypto play

BlackRock, a fund manager with over $10 trillion in assets, has grown significantly over the past few years. The firm provides asset and risk management services to clients and also helps clients by connecting them to various investment products.

However, it was seemingly late to jump on the crypto bandwagon. Its first real crypto venture (barring a partnership with Coinbase) came only in April 2022 following the launch of an exchange traded fund (ETF) which tracks U.S. and non-U.S. companies involved with blockchain technology.

Since then, BlackRock has poured more chips into its crypto pot. A month later, the fund manager launched a similar ETF targeting European customers. A private spot Bitcoin trust was even announced in August with the aim of connecting crypto to more traditional investors.

However, many businesses, including BlackRock, have had to cope with losses following their crypto play. A bear cycle has engulfed Bitcoin since late 2021 and the same has weighed heavily on the prices of other coins in the market. Furthermore, incidents such as LUNA’s downfall and the FTX collapse have exposed many cracks present in the crypto industry.

Meanwhile, the FTX contagion has spread thick and fast. Exchanges like BlockFi have descended into bankruptcy while those like Genesis Global Capital are struggling to make ends meet.

Outside of crypto, many firms are struggling to cope amidst a tight U.S. economy. BlackRock itself has been a culprit of stock market losses this year. Its third-quarter results were mixed, obtaining lower revenues and offering a lower EPS year-on-year. An analyst at research firm SeekingAlpha said

“The outlook is also not favorable (for BlackRock). The yield spread is currently negative, pointing to a recession within now and 1 year”

Fate of crypto?

Despite the many issues prevalent for crypto, many industry leaders, even those investing in traditional assets, say that the future remains bright nonetheless.

Despite BlackRock’s crypto losses, Fink said he considers the technology behind crypto to be ‘very important’. He added: “I believe the next generation for markets and next generation for securities will be tokenization of securities.”

Meanwhile, crypto advocates have advised the community to remain headstrong and wait for the bear cycle to pass. Those like Changpeng Zhao (CZ), CEO of Binance, have vowed to restore confidence among both investors by taking steps to ensure that other companies do not meet the same fate as FTX. In November 2022, CZ Binance had announced a recovery fund to help projects in liquidity crisis.

CZ Binance on FTX Crisis
Source: https://twitter.com/cz_binance/status/1592044496174612482

On December 2, Bitcoin’s eased from $17k following a daily gain of 4.5% on the prior day. The king coin’s price has risen earlier following Federal Reserve Chair Jerome Powell’s hawkish stance on the U.S. economy.

BTC/USD Daily Price Chart
BTC/USD Daily Price Chart, Source: TradingView

Leave a Comment

Related Articles

Our Partners

SwapCoin.com RapidCoin.com ChangeNOW.com Paybis.com WestcoastNFT.com