The cryptocurrency market erupted on July 18, 2018, after BlackRock — the world’s largest asset manager with approximately $6.3 trillion in assets under management — confirmed it had established a working group to evaluate blockchain technology and digital assets. The news sent Bitcoin soaring nearly 10% to around $7,400, a level not seen in almost six weeks, and triggered a broad-based rally across the entire crypto market.
TL;DR
- BlackRock, the world’s largest asset manager ($6.3T AUM), confirmed a crypto/blockchain working group
- Bitcoin surged ~10% to approximately $7,400, its highest level in six weeks
- Total crypto market capitalization jumped 8.7% to $293.6 billion
- CEO Larry Fink called BlackRock “a big student of blockchain” but tempered expectations on crypto demand
- The rally coincided with growing institutional momentum including Van Eck’s bitcoin ETF proposal
BlackRock’s Crypto Pivot
BlackRock’s announcement marked a significant shift in tone for a company whose CEO, Larry Fink, had previously dismissed Bitcoin as “an index of money laundering” in October 2017 and later described it as a “speculative investment.” Speaking to Reuters, Fink confirmed the working group’s existence, stating: “We are a big student of blockchain.” However, he was quick to temper expectations, adding that he did not see “huge demand for cryptocurrencies” among BlackRock’s client base.
Notably, the working group was not entirely new — sources familiar with the matter indicated it had actually existed since 2015. But the public acknowledgment from BlackRock’s leadership carried outsized weight given the firm’s dominance in global asset management, where it controls roughly 40% of the $5 trillion ETF market.
Market Responds With Vigor
The crypto market responded decisively to BlackRock’s overture. According to CoinMarketCap data from July 18, Bitcoin traded at approximately $7,370, up roughly 10% over 24 hours. Ethereum rose 5.5% to around $503, while XRP climbed 9.6% to approximately $0.517. Bitcoin Cash gained 6.5% to near $850, and EOS surged 10.5% to approximately $8.89.
Outside the top five, the rally was equally pronounced. Cardano rocketed 12.3% higher, and Stellar gained 7.8%, both receiving an additional boost from Coinbase’s announcement that it was exploring adding the tokens to its trading platform. The total cryptocurrency market capitalization swelled by 8.7% to approximately $293.6 billion.
Institutional Momentum Builds
The BlackRock news didn’t exist in a vacuum. The rally coincided with several other institutional developments that pointed to a shifting landscape for digital assets. Van Eck, a global money manager, and SolidX, a crypto startup, had submitted a proposal to the SEC for a physically-backed Bitcoin ETF — one that would be insured against loss or theft, addressing a key concern that led the SEC to reject the Winklevoss ETF proposal in March 2017.
The CBOE Global Markets, the world’s largest options exchange, had also thrown its weight behind the effort, proposing to facilitate trading of the Van Eck/SolidX ETF. Chris Yoo, portfolio manager at Black Square Capital Management, suggested that even conservative investment strategies from BlackRock would serve as a catalyst for Bitcoin price appreciation.
Meanwhile, Barry Silbert, CEO of Digital Currency Group, speaking at CNBC’s Delivering Alpha conference on the same day, declared that Bitcoin had already hit its 2018 low. Silbert revealed he had added to his Bitcoin position the previous week during the price nadir. While extremely bullish on Bitcoin’s long-term prospects, he cautioned that “99% of cryptos are worthless” — a stark reminder of the growing divide between established digital assets and the flood of ICO-era tokens.
Skeptics Push Back
Not everyone viewed the rally through rose-tinted glasses. Professor Nouriel Roubini, the economist nicknamed “Dr. Doom” for predicting the 2008 housing crisis, expressed suspicion about Bitcoin’s rapid climb, suggesting possible price manipulation. His comments echoed earlier research by professors John Griffin and Amin Shams of the University of Texas, whose paper “Is Bitcoin Really Un-Tethered?” claimed to have found links between Tether issuances and Bitcoin’s massive rally in late 2017 and early 2018.
Why This Matters
BlackRock’s public acknowledgment of its crypto exploration represented a watershed moment for institutional adoption of digital assets. At the time, the crypto market was still reeling from Bitcoin’s decline from its near-$20,000 peak in December 2017, and many institutional players remained publicly skeptical. The fact that the world’s largest asset manager was even willing to discuss blockchain and cryptocurrency in a constructive context lent significant credibility to the space. Combined with the pending Van Eck/SolidX ETF proposal, CBOE’s backing, and growing regulatory dialogue at the G20 level, July 18, 2018, stands as a pivotal date in the timeline of crypto’s march toward mainstream institutional acceptance — a journey that would ultimately culminate in the approval of spot Bitcoin ETFs years later.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Past performance is not indicative of future results.