BlackRock Pulled $15B Into Crypto. The Market Pulled Out $45.8B Right Back 🚂

BlackRock's digital asset funds shrank to $48.8 billion at the end of the second quarter from $79.6 billion a year earlier, a decline of roughly 39%, even as investors added $15.1 billion in net inflows over the past 12 months, according to the firm's latest earnings release on Wednesday. The drawdown was driven by $45.8 billion in market depreciation, underscoring how tightly the asset manager's crypto ETF business remains linked to digital asset prices.

The slide extended into the second quarter, when BlackRock's digital asset products recorded $3.1 billion in net outflows. The reporting period was a weak stretch for crypto markets: bitcoin ($BTC) fell more than 14% in the quarter to trade at $64,757.98, while ether ($ETH) declined 25% over the same span. Both assets struggled to reverse losses accumulated earlier in the year.

The crypto figures stood in contrast to BlackRock's broader operations, which posted record assets under management of $15.3 trillion after attracting $192 billion in net inflows during the quarter. The company also exceeded Wall Street expectations with adjusted earnings per share of $13.91 on $7.08 billion in revenue. Shares of BlackRock (BLK) traded 4.15% higher at £1,068 in pre-market trading on Wednesday.

BlackRock is targeting $500 million in annual revenue from its crypto business under a 2030 plan outlined on its earnings call. That target would mark an increase of more than tenfold over the $40 million the firm currently generates in base fees and securities lending from the unit, which accounts for less than 1% of total fee revenue. The company has steadily expanded its crypto ETF lineup since listing its spot bitcoin ETF (IBIT) and spot ether ETF (ETHA) in 2024, and more recently introduced the iShares Bitcoin Income ETF (BITY), which seeks to generate yield from bitcoin holdings.