BlackRock picks Anchorage Digital for added crypto custody

BlackRock is partnering with Anchorage Digital on crypto.

The largest asset manager globally announced Tuesday it will enter a new master custody service agreement with Anchorage Digital, the only U.S. federally chartered digital asset bank.

Coinbase will continue to serve as the primary holder of BlackRock's bitcoin reserves and no assets were immediately transferred.

BlackRock Fund Advisors and Anchorage will operate under a dual-custodian model. The agreement to bring on Anchorage grants operational alternatives; the bank will support spot crypto exchange-traded products and BlackRock funds, according to the company. The setup allows for increased resiliency for BlackRock against potential custody service disruptions. 

Anchorage Digital's federal charter was a draw for the company, said Robert Mitchnick, head of digital assets at BlackRock.

"As demand for digital asset products increases, and as our footprint in the ecosystem grows, we continue to expand our network of service providers with a focus on the highest quality institutional providers," Mitchnick said. "After a thorough evaluation, Anchorage Digital clearly meets these standards, and we are excited to be expanding our network of eligible digital asset service providers with the addition of Anchorage Digital." 

Under the agreement, Anchorage will hold all private keys in cold storage. The custodian is required to maintain insurance coverage and comply with other outlined provisions for blockchain forks (when a chain's protocol changes, intentionally or unintentionally, due to adjustments) and indemnification responsibilities. 

"As BlackRock continues to bridge digital assets and traditional finance, we are excited by the opportunity to set a new standard for tailored access to the digital asset class," said Nathan McCauley, CEO and co-founder of Anchorage Digital. "By providing federally regulated crypto infrastructure, we are helping BlackRock to meet client demand for today and tomorrow." 

BlackRock, which has $11 trillion in assets, is the largest issuer of exchange-traded products in the world. The firm launched the iShares Bitcoin Trust exchange-traded fund in January 2024 and it has consistently ranked among the top bitcoin exchange-traded funds for inflows. 

At the Digital Asset Summit in New York last month, Mitchnick said crypto ETFs are getting more interest as the format appeals to more investors. Including staking for things like ether ETFs could boost that, he said. Staking is a way for investors to earn yield on their cryptocurrency holdings by keeping tokens on the network for a set period of time.

"An ETF, it's turned out, has been a really, really compelling vehicle through which to hold bitcoin for lots of different investor types," Mitchnick said. "There's no question it's less perfect for ether today without staking. A staking yield is a meaningful part of how you can generate investment return in this space."

BlackRock also offers its USD Institutional Digital Fund, BUIDL, the asset manager's first tokenized money market fund option which it released in March 2024. With RWA (real-world asset) tokenization, traditional financial products can be traded as crypto tokens on blockchains. 

Markets overall are in flux as investors reel from President Donald Trump's expansive global tariffs announced last week. Trump's universal minimum 10% tariffs on all U.S. imports went into effect on Saturday. Sixty nations are privy to additional import taxes with countries like China and Vietnam hit with high rates and have begun to announce countermeasures. 

Goldman Sachs economists increased their odds of a U.S. recession from 35% to 45% last week and that model assumes it will not fully go into effect. If the duties are not negotiated to be reduced or removed, Goldman Sachs analysts wrote, "we expect to change our forecast to a recession."

J.P.Morgan last week also increased its forecast odds for a recession to 60%, up from 40% previously.

BlackRock CEO Larry Fink said the turbulence of the current market could lead to another 20% drop. Speaking at the Economic Club of New York on Monday, Fink said most CEOs he's spoken to "would say we are probably in a recession right now."

"I see it more as a buying opportunity than a selling opportunity, but that doesn't mean we can't go down further," Fink said. "That doesn't mean we can't fall another 20% from here too."

Fink noted a market downturn will have an effect on a wide swath of Americans, not just money managers.

"The reality is 62% of Americans now invest in equities – the market impact is impacting Main Street," Fink said. The tumult "is going to freeze more and more consumption. I think we're going to start seeing that really quickly."